Brazil’s state oil firm Petrobras (PETR4.SA) is planning to sign a memorandum of understanding with mining giant Vale (VALE3.SA) to explore potential joint ventures in renewable energy, according to the company’s CEO Jean Paul Prates. The partnership between the two companies would focus on areas such as hydrogen production and other energy transition activities.
Petrobras has been making efforts to expand into renewable energy, with recent plans to develop offshore wind farms. Collaborating with Vale, which is a consumer of energy, could provide opportunities for both companies to leverage their expertise and resources in the renewable energy sector.
The move comes as Petrobras looks for alternative suppliers for diesel, amid a ban on Russian imports, which have been the main source of imported diesel in Brazil. Petrobras CEO Prates stated that the company may strategically and if necessary import diesel from abroad to meet its contracts and explore new markets.
Russia has surpassed the United States as Brazil’s top supplier of diesel fuel. However, the widening gap between Petrobras’ refinery prices and those charged abroad has discouraged third-party imports, according to analysts. Despite this, Prates expressed confidence that Petrobras can maintain the same level of profitability and stated that the company’s refinery utilization rate is currently at 94%.
This partnership between Petrobras and Vale in the renewable energy sector showcases both companies’ commitment to transitioning to cleaner energy sources. By leveraging each other’s strengths, they can accelerate the development of renewable energy projects and contribute to Brazil’s sustainable energy goals.
It is worth noting that the collaboration between Petrobras and Vale is still in the memorandum of understanding stage, and further details about specific projects and investments are yet to be disclosed.