Will Petrobras (PETR4) pay less dividends because of wind power?

Petrobras signed a letter of intent with Equinor for investments in wind energy (Image: Andre Coelho/Bloomberg)

The market shows concern with the interest of Petrobras (PETR3; PETR4) in investing in offshore wind energy, after the company announced a letter of intent with the Norwegian equinor which expands cooperation between companies to assess the viability of seven projects on the Brazilian coast.

The viability of the projects and the potential profits they can bring, in addition to the fear of a reduction in the distribution of dividends, are the main points mentioned by the analysts. According to Petrobras, the initiatives could cost around US$ 70 billion and take around six years to start.

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The general director of PSR (Consultancy and Energy Analysis), Luiz Barroso, assesses that the move announced by the oil company seems to be yet another confirmation of intentions to enter into low carbon initiatives. “I don’t see it as a statement that Petrobras will invest in wind power. It’s more of a directionexplains the director of the energy consultancy.

For Nivalde de Castro, coordinating professor at Gesel (UFRJ Electric Sector Studies Group), this is a start. “They are still going to analyze the economic viability of these projects, there is nothing definite about investments“.

According to sector specialists, the movement of Petrobras towards decarbonization is in line with the global energy transition trend, seen as irreversible. Barroso, from PSR, explains that other oil companies are becoming integrated energy companies and focusing on low-carbon energy. Each one, however, with its own strategy and priorities, he points out.

Less dividends?

The state-owned company’s announcement signals a change in trajectory in relation to the previous government, when the priority was the maximization of dividends, reducing the size of the company, recalls Castro, from UFRJ.

From now on, however, he assesses that the Petrobras signals the desire to become an energy company. Even so, according to Castro, the change should not be fast.

The company’s investment plan, previously focused on profit distribution, should change to “transform the state-owned company into an instrument of transition in the Brazilian government’s energy policy”, according to the researcher.

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Source: Moneytimes

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