Brazil set to discuss joining OPEC+

Brazil's energy policy council, CNPE, is set to discuss the country possibly becoming a member of the OPEC+ (Organization of the Petroleum Exporting Countries and allies) group at its next meeting on February 18.

OPEC+ is an alliance that includes the 13 OPEC members and 10 other oil-exporting countries that are not members of the cartel. The group was established in 2016 to coordinate production policies and influence global oil prices.

Speaking to journalists on Wednesday, Brazil’s mines and energy minister, Alexandre Silveira, recalled that the invitation to join the group was extended in late 2023 during President Luiz Inácio Lula da Silva's visit to Saudi Arabia, which leads OPEC.

"OPEC+ is a platform for discussions among non-OPEC countries – it is important to highlight that. OPEC itself has obligations that Brazil could neither legally nor technically assume, such as production cuts," Silveira said.

He emphasized that the initiative is primarily about shaping the future of global energy.

"Participating in these discussion forums is crucial, as they allow us to develop a strategic vision for economic growth with sustainability," the minister added. 

Silveira to remain in office

Lula confirmed in an interview with radio stations in Minas Gerais state that Silveira "will remain in office," praising him as an "exceptional aide."

The president's statement comes amid the ministerial reform currently underway in the federal government.

Silveira is a member of the Social Democratic Party (PSD), one of the key parties in the "Centrão," a powerful bloc in the national congress. His presence in the government helps Lula strengthen ties with the PSD and secure support for key votes.

Additionally, as a licensed senator from Minas Gerais, Silveira represents one of Brazil’s largest electoral strongholds, making him a crucial figure in expanding Lula’s political base in the state, which has historically played a decisive role in elections.

Irrigation alliance

On Wednesday, Silveira, along with agriculture and livestock minister Carlos Fávaro and regional integration and development minister Waldez Góes, launched the alliance for energy development of Brazil’s irrigation hubs and projects.

The initiative is intended to ensure stable electricity supply for irrigation hubs across the country, which are critical for boosting agricultural productivity and strengthening food security.

One of the alliance’s proposals is to introduce more flexible electricity rates for farmers. Different crops have specific irrigation needs based on harvest frequency and volume, requiring tailored schedules to maximize efficiency.

Irrigated agriculture hubs are agricultural clusters where irrigation is already in use and where expansion is feasible, given the availability of water and suitable soil. These hubs can operate on a large scale, incorporating technologies that enable efficient irrigation over vast areas, facilitating the cultivation of crops such as grains, fruits and vegetables.

Meanwhile, Silveira stated that Brazil has allocated a 4bn-real (US$690mn) budget this year to eliminate energy poverty by 2027, primarily through PV solar power and battery storage.

Itaipu

Silveira also announced that the government has already prepared a resolution to address the deficit caused by the energy rate for the Itaipu hydroelectric plant.

"The resolution is ready; it is with the executive secretariat, which is finalizing the legal opinion. It is a technical solution, a decision on where to allocate this cost. The problem is solved," the minister said.

In December, Brazil's electricity regulator, Aneel, approved the temporary extension of Itaipu Binacional's contracted power transfer rate at US$17.66/kW per month for the period from January 1 to March 31, 2025.

The rate consists of the unitary cost of electricity service (CUSE), the cost of energy ceded by Paraguay to Brazil, the balance of the Itaipu account and the portion due to the removal of the adjustment factor.

According to Aneel, the Brazilian owner of Itaipu, ENBPar, reported an estimated negative balance of approximately 333mn reais for 2024.