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Brazil's New Petrobras Chief Calls to Speed Up Oil Exploration

Brazilian oil and gas company Petrobras President Magda Chambriard gestures during a press conference in Rio de Janeiro on May 27, 2024- AFP
Brazilian oil and gas company Petrobras President Magda Chambriard gestures during a press conference in Rio de Janeiro on May 27, 2024- AFP
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Brazil's New Petrobras Chief Calls to Speed Up Oil Exploration

Brazilian oil and gas company Petrobras President Magda Chambriard gestures during a press conference in Rio de Janeiro on May 27, 2024- AFP
Brazilian oil and gas company Petrobras President Magda Chambriard gestures during a press conference in Rio de Janeiro on May 27, 2024- AFP

The new boss of Brazil's Petrobras said it was crucial that the state-run company "accelerate" oil exploration, including in a controversial offshore basin near the mouth of the Amazon River.

Former regulator Magda Chambriard took over as chief executive of the oil giant on Friday, after left-wing President Luiz Inacio Lula da Silva sacked her predecessor, AFP reported.

In her first press conference, the 66-year-old said exploring "new frontiers" was key to the company's survival, touching on an issue which has divided the Lula administration and infuriated environmentalists.

"This company's exploratory effort ... has to be accelerated," she said.

"The focus is ensuring that Petrobras' oil assets continue to grow. This means it is essential to continue exploring oil off the Brazilian coast. This includes the Equatorial Margin and the Amapa coast," she said.

The Equatorial Margin is a basin near the mouth of the Amazon River, that is considered Brazil's most promising frontier for oil exploration, with studies suggesting it holds massive crude deposits.

It lies near regions in Guyana, French Guiana and Suriname that have recently made major oil discoveries.

However, environmentalists warn of potentially devastating impacts on the ecologically sensitive region.

The project has triggered a battle within the Lula administration and the environmental protection agency, IBAMA, denied Petrobras an exploration license in May last year.

Environmental groups have long opposed crude oil exploration projects in the area where the Amazon meets the Atlantic Ocean, warning that it could pose risks to a freshwater barrier reef discovered there in 2016.

Chambriard said the energy ministry of the world's seventh-largest oil producing country "would love to drill" in this area.

"We need to have authorization to explore. We will have to talk to the Ministry of the Environment and show what Petrobras is offering in terms of environmental care, much more than what the law demands," said Chambriard.

She said the deepwater deposits that Brazil has been exploiting for the past 15 years would reach their peak in 2030.

"We have to be careful with reserves, and imports are out of the question," she said.

Chambriard was appointed after her predecessor Jean Paul Prates was sacked earlier this month following a spat between Petrobras and shareholders over dividend payments.

She is the sixth CEO of the company in under three years, after a turbulent period that included a major corruption scandal in the 2010s.

 

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Honda and Nissan Start Merger Talks in Historic Pivot

Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon
Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon
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Honda and Nissan Start Merger Talks in Historic Pivot

Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon
Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, Toshihiro Mibe, Director, President and Representative Executive Officer of Honda and Takao Kato, Director, Representative Executive Officer, President & CEO of Mitsubishi Motors, attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon

Honda and Nissan have started talks toward a potential merger, they said on Monday, a historic pivot for Japan's auto industry that underlines the threat Chinese EV makers now pose to some of the world's best known car makers, Reuters said.
The integration would create the world's third-largest auto group by vehicle sales after Toyota and Volkswagen. It would also give the two companies scale and a chance to share resources in the face of intense competition from Tesla and more nimble Chinese rivals, such as BYD.
The merger of the two storied Japanese brands - Honda is Japan's second-largest automaker and Nissan its no. 3 - would mark the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis in a $52 billion deal.
Smaller Mitsubishi Motors, in which Nissan is top shareholder, was also considering joining, the companies said. The chief executives of all three companies held a joint press conference in Tokyo.
"The rise of Chinese automakers and new players has changed the car industry quite a lot," Honda CEO Toshihiro Mibe told the press conference.
"We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten," he said.
The two companies would aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen through the potential merger, they said.
They aimed to wrap up talks around June 2025 and then set up a holding company by August 2026, at which time both companies' shares would be delisted.
Honda has a market capitalisation of more than $40 billion, while Nissan is valued at about $10 billion.
Honda will appoint the majority of the holding company's board, it said.
Combining with Mitsubishi Motors would take the Japanese group's global sales to more than 8 million cars. The current No. 3 group is South Korea's Hyundai and Kia .
Honda and Nissan have been exploring ways to bolster their partnership, including a merger, Reuters reported last week.
The two companies said in March they were considering cooperation on electrification and software development. They agreed to conduct joint research and widened the collaboration to Mitsubishi Motors in August.
Last month, Nissan announced a plan to cut 9,000 jobs and 20% of its global production capacity after sales plunged in the key China and U.S. markets. Honda also reported worse-than-expected earnings due to declining sales in China.
Like other foreign carmakers, Honda and Nissan have lost ground in the world's biggest market China to BYD and other local brands that make electric and hybrid cars loaded with innovative software.
In a separate online press conference with the Foreign Correspondents Club of Japan on Monday, former Nissan chairman Carlos Ghosn said he did not believe the Honda-Nissan alliance would be successful, saying the two automakers were not complementary.
Ghosn is wanted as a fugitive in Japan for jumping bail and fleeing to Lebanon. His 2018 arrest for financial wrongdoing pitched Nissan into a crisis.
French automaker Renault, Nissan's largest shareholder, is open in principle to a deal and would examine all the implications of a tie-up, sources have said.
Taiwan's Foxconn, seeking to expand its nascent EV contract manufacturing business, approached Nissan about a bid but the Japanese company rejected it, sources have told Reuters.
Foxconn decided to pause the approach after it sent a delegation to meet with Renault in France, Bloomberg News reported on Friday.
Shares in Honda ended the day up 3.8%, Nissan rose 1.6% and Mitsubishi Motors gained 5.3% after the news reports on the details of the planned merger, while the benchmark Nikkei closed up 1.2%.