‘Brazil stands out among the priority countries’ – senior BP exec

BP is investing in several fronts of Brazil’s energy sector. While preparing to begin a new offshore oil and gas exploration campaign, the company is developing 4GW of PV solar power projects.

It is also involved with local gas-fired/LNG, biofuels and downstream undertakings. 

In this email interview, BP’s subsurface country manager, Shira Paulson, talks about the outlook for Brazil.  

BNamericas: What are the next exploratory campaigns planned by BP in Brazil? Where and when will they take place?

Paulson: The Pau Brasil exploration campaign, located in the pre-salt of the Santos basin, is scheduled to start in 2024. The block is operated by BP with a 50% stake, in partnership with CNOOC Petroleum [30%] and Ecopetrol [20%].

BNamericas: What are the expectations regarding the Bumerangue block?

Paulson: Bumerangue strengthens BP's production and exploration plans in Brazil, concentrating efforts mainly in the Campos and Santos basins, with a focus on the pre-salt. 

That said, BP's strategy is to focus on resilient hydrocarbons with low emissions, and we believe Bumerangue fits this strategy.

BNamericas: Does the company intend to carry out exploratory activities in the Barreirinhas basin?

Paulson: The concession contract for block BAR-M-346 is in the first exploratory period and has been suspended since 2019, until [the federal environmental regulator] Ibama's final decision on the license request for drilling the first exploratory well in the block area. 

Today, BP cannot assume an expected production date before completing the exploration process.

BNamericas: Are you considering acquiring new oil and gas exploration and/or production assets in the country, either as operator or partner, through [hydrocarbons regulator] ANP auctions and/or M&As?

Paulson: We currently have seven exploration blocks, a portfolio of high-quality assets and opportunities to be tested in Brazil. 

We continue to demonstrate our commitment to growth in the country and our strong belief in the value that deepwater resources bring to BP's global portfolio. 

We keep evaluating opportunities in the upstream segment that are aligned with our vision of net zero hydrocarbon production.

BNamericas: Does BP have a timeframe to start producing oil and/or gas in Brazil?

Paulson: Due to the exploratory nature of our portfolio, it is still too early to deeply understand and share this information.

BNamericas: How much does BP intend to invest in Brazil in the coming years? Is the country a long-term bet for the company?

Paulson: Brazil stands out among the priority countries for new business development at BP and we want to increasingly expand our portfolio and invest in new businesses.

The country offers a significant growth base in the energy transformation process. Our upstream strategy is to produce resilient hydrocarbons, maximize returns and cash flow and reduce emissions by qualifying our portfolio to focus on barrels of the highest excellence.

That said, we’re always evaluating opportunities in the upstream segment that are aligned with our strategy.

BNamericas: Is BP considering investing in the mid/downstream segments in the country?

Paulson: In the downstream segment, BP already operates with the brands Castrol, one of the leaders in the lubricants segment; Air BP, present in about 40 locations, including [the airports of] Guarulhos in São Paulo, Viracopos in Campinas, and Galeão in Rio de Janeiro; and the joint venture Opla, located in Paulínia in São Paulo, which acts as a strategic asset in the ethanol sector and derivatives distribution chain, with high potential for growth and value generation through the opening of the terminal to third parties and relevant productivity gains in the use of the asset.

BNamericas: Are investments in renewable energy generation projects on the company's radar? Is offshore wind energy, for example, a possibility?

Paulson: The strategy of investing in and developing renewable energy is one of the pillars of BP's energy transformation. To give you an idea, the proportion of what is invested globally in renewables at BP grew from 3% in 2019 to 30% in 2022.

In Brazil, we currently have three joint ventures focused on the energy transition: Gás Natural Açu (GNA), Lightsource BP and BP Bunge.

Lightsource BP aims to develop 10GW of solar projects by the end of 2023 and, in Brazil, has 4GW of projects under development and 210MW installed. 

Lightsource BP recently signed a memorandum of understanding with the government of Ceará to expand renewable energy development in the state for a period of five years. The joint venture invested 800mn reais [US$164mn] in the construction of the Milagres solar complex in Abaiara, Cariri.

GNA consists of two combined cycle power plants, GNA I and GNA II, with capacity of 1.3GW and 1.7 GW, respectively, and the only private LNG terminal in the southeast region of Brazil, with regasification capacity of 21Mm3/d. Together, these projects will form the largest LNG-to-power complex in Latin America, located in Açu port [in Rio e Janeiro state]. 

BNamericas: Could you cite examples of initiatives linked to the BP ESG agenda in Brazil?

Paulson: Our sustainability framework reinforces our strategy to become an integrated energy company. It sets out 20 objectives to reach our goal of net zero, improving people's lives and caring for our planet. 

A strong example of this commitment is that six of the 11 members of our senior leadership team are women, making BP, we believe, the first major energy company to have a majority of women at the top of the organization. 

By 2025, we aim to have an equal number of women and men in our top 120 leadership positions, with 40% of positions at the next leadership level held by women. 

By 2030, we aim to have women occupying at least half of all leadership positions in the group, with 40% women at all other levels. For context, in 2022, 33% of the group's leadership positions were held by women, and in 2021 it was 32%.

Our biodiversity objectives seek to achieve a positive impact on our new projects, enhance biodiversity around our existing key operating sites and support biodiversity restoration in countries where we have current or growing investments. 

All new BP projects must have plans aiming to achieve ‘net positive impact’ [NPI], with a target of delivering 90% of actions within five years of project approval. 

This requirement applies to projects across our portfolio – from oil and gas to renewables – for as long as we operate the asset.

We can also mention our scope 3 goal, as we aim to be net zero on an absolute carbon basis in our oil and gas production by 2050 or earlier. This is based on the BP shareholding and net share of BP production. Our target is a 10-15% decrease by 2025 and a 20-30% reduction by 2030.

In Brazil, we also have important investments underway in our JVs that help us achieve our sustainability goals, such as at BP Bunge Bioenergia, one of the largest bioethanol producers in Brazil. The company has been expanding the use of bio-inputs from bacteria and organic matter. As a result of investments in research, intelligence and technology, it will enrich the soil with essential nutrients, eliminating the use of chemical fertilizers, including the NPK group [nitrogen, phosphorus and potassium].

BNamericas: Does BP invest in technological innovation in Brazil? What projects are underway?

Paulson: Globally, BP has several initiatives that represent our efforts to advance technological innovation, such as investing in energy research start-ups to use artificial intelligence technology to predict, control and optimize energy use in buildings, or how to reduce our own emissions by decreasing carbon burning, improving energy efficiency and designing operations in new ways.

In Brazil, we were one of the first international energy companies to invest in biofuels 10 years ago. Today, we’re one of the biggest players in the market with the bioenergy powerhouse we formed with US agricultural commodities giant Bunge. 

The move is further recognition of the huge role bioethanol plays in reducing emissions in the transportation sector. BP Bunge's units use technology present in about 1,200 agricultural and transport equipment, connected to an integrated logistics management center, ‘SmartLog’, with industry 4.0 resources, such as big data, artificial intelligence, internet of things and robotics. The center monitors 24 hours, in real time, online and remotely, the entire planting, harvesting and transportation operation. 

The recent offer of 4G connectivity in the sugarcane areas of its 11 units across the country, reaching 3mn hectares spread across the states of Goiás, Minas Gerais, Mato Grosso do Sul, São Paulo and Tocantins, will help to foster this process. 

In these locations, BP Bunge has a total planted area of 450,000 hectares and with the expansion of connectivity, more resources will be available. In addition, data generation will be more agile, assisting in decision making at the operation sites, contributing to increased productivity and reduced production costs.

Meanwhile, our Lightsource BP joint venture is not only growing rapidly, but also accelerating the shift to renewable energy in 10 different countries. Most recently, Lightsource BP entered the rapidly expanding solar power market in Brazil, buying 1.9GW of large-scale projects in the country.