Brazil, set to become a member of the OPEC+ alliance from January 2024, has clarified that it will not be assigned any production quotas and will not participate in oil production cuts.
Jean Paul Prates, the Chief Executive of Brazil’s state-controlled oil company, Petrobras, emphasized in an interview with Reuters that Brazil would not accept production quotas. He stated, “We would never be part of an organization that imposes (production) quotas to Brazil; Petrobras is a publicly-traded company, and we cannot have quotas.”
The unexpected announcement of Brazil’s inclusion in the OPEC+ alliance was made during the OPEC+ meeting on Thursday.
However, there had been uncertainty about whether Brazil would be subject to voluntary production cuts along with other alliance members.
The Petrobras CEO clarified that Brazil would not have a production quota and would join OPEC+ as an observer member initially.
Brazil, one of the major oil producers globally, currently extracts around 3.7 million barrels per day (bpd) of crude, with Petrobras and its joint ventures contributing significantly to this production.
opec aims to further increase its oil production by 61% from 2.15 million bpd in 2023 to 3.46 million bpd by 2030. The country’s oil and gas production have been setting records in 2023 as new platforms in the offshore pre-salt fields become operational.
Although Brazil has received an invitation to join OPEC+, President Luiz Inacio Lula da Silva has not formally responded yet.
Prates indicated that Brazil would initially participate as an observer member in OPEC+, and its entry into the alliance is a significant development in the global oil landscape.
