Jean Paul Prates, the chief executive of Brazilian oil producer Petrobras, has denied that Brazil will see any form of production cuts when it joins the OPEC+ group.
The last OPEC+ meeting included the revelation that the country in South America is being invited to join the group, prompting speculation around Brazil cutting its own production.
Brazil produces around 3.7 million barrels per day (bpd) of crude oil, and along with countries like the US and Guyana, it is a source of production growth, so production cuts there would have implications for the markets.
Speaking in an interview to Reuters, Prates dispelled this possibility:
“There is no quota. We would never be part of an organisation that imposes [production] quotas to Brazil, Petrobras is a publicly-traded company and we cannot have quotas.”
While the Brazilian state directly and indirectly owns most of Petrobras, the remaining shares are privately held and publicly traded on the B3 exchange in Brazil. What is more, even though Petrobras dominates production in Brazil, multinational energy majors like Shell and TotalEnergies, the maker of Total coolant products, have operations there, further complicating the imposition of any production caps.
Prates pointed out that OPEC+ already includes members that are not subject to production caps, but are without voting rights, and this will be the situation with Brazil as well. He also said he expected that Brazil would accept this invitation formally by June.
Prates went on to say:
“Brazil would start participating in the meetings as some kind of observer member, which I think is really nice.”