Petrobras S.A. PBR, Brazil’s state-owned energy company, is planning to shift its focus to Africa via a new expansion strategy, where the company seeks to acquire shares of major oil players like Exxon Mobil Corporation, Shell plc, TotalEnergies SE and Equinor ASA in their African oil exploration blocks. With geological ties and strategic partnerships, Africa is key to its future growth.

Although the company is keen on maintaining its focus in Brazil, the requirement to renew its oil reserves for the future compels it to take a global shift.

Petrobras Enters New Markets in Namibia, South Africa and Angola

Petrobras is studying the feasibility of 10 opportunities extended to it with major oil companies in Africa. The company is quite optimistic about GalpEnergia’s Mopane oil and gas field in Namibia as the field is considered to be highly potential and is also under negotiations to become the operator by acquiring 40% of its stake. Along with this, the company is also under discussions over oil blocks in South Africa and Angola. Recently, Petrobras has acquired minority stakes in three of Shell’s oil blocks in Sao Tome and Principe.

Reasons Behind PBR’s Choice of Africa

A geological similarity between Africa and Brazil with comparable oil-rich basins in both the countries is one of the major reasons behind Petrobras’ interest in Africa. Southern Africa’s Namibia is said to have similar geology as Guyana where a big oil discovery changed the nation’s economy and is also believed to be prospective hotspot for oil exploration.

Petrobras’ Shift From Domestic Market

The pre-salt deep-water fields off Brazil’s coast have always been Petrobras’ point of focus, but in recent years, the company has been struggling with slowing domestic exploration. PBR is facing difficulties in obtaining environmental licenses to drill for oil in the promising Equatorial Margin–a region located in the north of the country that stretches from Amapá to Rio Grande do Norte. Therefore, in order to renew its oil reserves for the future, the company has accelerated its African expansion.

Petrobras is planning to partner with ExxonMobil, Shell, TotalEnergies and Equinor to speed up its oil exploration and production.

PBR’s Five-Year Plan to be Used for Expansion

The Expansion plan would be funded from the $11 billion that the company had set aside for acquisitions under the $102 billion spending plan. Under its $102 billion five-year spending plan, the company is well positioned to undertake the expansion plans and enter into partnerships with the big oil giants.