Brazil’s Petrobras considers establishing China subsidiary
- September 1, 2023
- Posted by: Quatro Strategies
- Categories: Americas, Business & Politics, China, Oil & Gas
Petrobras, the state-run oil company of Brazil, is planning to establish a Chinese subsidiary as part of its efforts to strengthen its relationship with China, one of its most significant trading partners. This move is part of Petrobras’ strategy to significantly increase its share of China’s oil imports over the next couple of decades, aiming to triple its current 5% share. The CEO of Petrobras, Jean Paul Prates, mentioned that the subsidiary is expected to be created in the next year, subject to formal approval.
The creation of a Chinese subsidiary is seen as a strategic move by Petrobras to enhance its presence in China and foster closer partnerships with Chinese companies, especially in the energy sector. It’s worth noting that Petrobras has already initiated discussions with several Chinese firms, including CNOOC and Sinopec, as well as financial institutions like China Development Bank and Bank of China, to explore potential energy partnerships and joint projects.
Furthermore, the establishment of a Chinese subsidiary would provide Petrobras with a platform to operate and participate in projects as a partner, not only in China but also in other countries, including those in Africa. This approach aligns with Petrobras’ broader international expansion strategy and its goal to diversify its operations and revenue streams.
The move to create a Petrobras China subsidiary is also seen as a positive signal for strengthening Brazil-China relations under the leadership of President Luiz Inacio Lula da Silva. Unlike his predecessor, Jair Bolsonaro, President Lula has advocated for balanced and cooperative relations with both China and the United States. His administration’s approach to foreign policy emphasizes building strong partnerships with major global players, and China is a key focus due to its growing economic influence.
Overall, Petrobras’ decision to create a Chinese subsidiary reflects its commitment to expanding its footprint in China’s energy market and fostering closer cooperation between Brazil and China in various international projects, contributing to the strengthening of diplomatic ties between the two countries.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
UK approves 24 new oil and gas exploration licenses in the North Sea
UK’s North Sea Transition Authority (NSTA) has issued 24 new hydrocarbon exploration licenses to 17 companies, marking the second tranche of its 33rd oil and gas licensing round. Among the successful bidders are major energy players such as Shell, BP, Equinor, and TotalEnergies…
Europe’s defense and green sectors threatened by Chinese mineral leverage
Europe is facing a mounting crisis over access to rare earth elements, as traders scramble for supplies in the wake of China’s sweeping export controls. The restrictions, which effectively cut off direct access to critical materials like terbium, yttrium, and samarium, have forced a pivot to secondary markets and emergency stockpiling, but the underlying vulnerability remains stark: Europe’s defense and green industrial strategies are still deeply dependent on China.
The supply shock stems from measures introduced by Beijing in April, tightening the licensing system that governs exports of dual-use materials crucial to high-tech defense and clean energy applications. While defense firms claim their operations are shielded by diversified supply chains and buffer stocks, industry insiders warn that the situation is becoming increasingly precarious.
India’s renewable boom faces thermal-era mistakes
India’s renewable energy ambitions are colliding with the realities of uneven demand growth, inadequate transmission, and the risk of stranded assets. At the BloombergNEF Summit in New Delhi, Central Electricity Authority Chairman Ghanshyam Prasad warned developers that building new capacity without factoring in realistic demand scenarios could replicate the mistakes of the last decade, when excessive thermal capacity left many generators bankrupt.
The scale of the mismatch is already evident. India currently has around 44 GW of renewable projects without power purchase agreements, effectively stranded capacity. Grid operators have been forced to curtail renewable input to balance the system, and large substations, such as the 4,000 MW facility at Khavda in Gujarat, are running far below potential, with only 300–500 MW connected.