Petrobras CEO says Brazil will not cap oil output as part of joining OPEC (NYSE:PBR)

Brazil is set to join OPEC+ in January but will not participate in the cartel’s coordinated production caps, the CEO of state-run oil company Petrobras (NYSE:PBR) said Friday.

“We would never be part of an organization that imposes [production] quotas to Brazil,” CEO Jean Paul Prates told Reuters. “Petrobras is a publicly-traded company and we cannot have quotas.”

The surprise announcement that Brazil will join OPEC raised immediate questions on whether the country would take part in voluntary production cuts approaching 2M bbl/day starting early next year.

Prates said he welcomed Brazil’s move to join the group, but noted OPEC+ includes countries with no voting rights and no production cap, which he said would be the case for Brazil.

The Petrobras (PBR) CEO said he sees Brazil formally joining OPEC in June and participating in meetings as an observer member, adding the move would be key to energy transition efforts for both OPEC and Brazil.

Separately, Petrobras (PBR) has filed requests with Brazil’s competition regulator Cade earlier this week to renegotiate terms that stipulated the company must sell some of its oil refining and natural gas assets.

In 2019, the company had committed to a timeframe for selling off all oil refineries outside the states of Rio de Janeiro and Sao Paulo, as well as its natural gas transportation and distribution assets.