Offshore Technology

Daily Newsletter

07 August 2023

Daily Newsletter

Petrobras considers increasing average capacity use of refineries

The oil company set new records for diesel production in June and July and will hit targets in August too, according to a senior Petrobras executive.

Petrobras is considering further increasing the average capacity use of refineries in the third quarter of 2023, reported Reuters.

Between April and June, the Brazilian Government-backed oil company increased usage to 93%, the highest since the third quarter of 2015.

In a conference call with analysts, Petrobras executive director of industrial processes and products William France noted that the oil company set new records for diesel production in June and July and will hit targets in August too.

To offer more competitive fuel pricing, the company optimised its refining and logistics infrastructure.

According to Petrobas executive director of logistics, commercialisation and markets Claudio Schlosser, the business is still keeping an eye on the fuel markets and will change rates as needed.

In relation to the global economy and the oil supply, he claimed that Petrobras currently perceives "great uncertainty" in the world, which raises price volatility.

Late last week, Petrobras reported a consolidated net income attributable to the shareholders of the company of $5.82bn, (28.3bn reais), a 47.06% drop comapred with the same period a year ago.

The fall was attributed to the depreciation of Brent, the drop in global diesel crack spreads of over 40%, and greater operating costs including impairment charges and tax expenses.

Due to the size of the pre-salt projects and the impact of the signature bonus associated with the Southwest Sagittarius, gua Marinha and North Brava fields, capital expenditure during the review period was $3.2bn, or 5.46% more than year-over-year.

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.