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Brazil's Petrobras and France's Total ink pact for renewable energy projects

posted onJuly 12, 2018
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Brazil's state-run oil and gas giant Petróleo Brasileiro SA or Petrobras signed a Memorandum of Understanding (MoU) with French oil major Total SA and its renewables affiliate Total Eren SA which sets the general framework for collaboration in potential onshore solar and wind projects in the South American country. 

Petrobras said the MoU is non-binding but "indicates the willingness of the companies to work together to develop projects in these segments". It builds on a strategic partnership between the companies signed in February 2017 in the upstream and downstream oil and gas industries in the country.

The MoU is part of Petrobras’ strategy to develop high-value businesses in renewable energy in partnership with major global players, to facilitate the transition to a low-carbon matrix, the Rio de Janeiro-based company stated.

According to Petrobras, this partnership dilutes the risks related to Brazil's renewable energy business and brings potential gains in scale and synergies. 

Petrobras

Currently, Petrobras has four wind farms totaling 104 MW. These farms were traded on the Regulated Market Environment (“ACR”) in the 2009 reserve energy auction and entered into operation in 2011. The company also owns a 1.1 MW solar photovoltaic power research and development plant in the northeastern state of Rio Grande do Norte, where the operations of four types of technology are currently under evaluation. 

Regarding price performance Petrobras has gained 32.7% in the past year compared with 35.8% growth of its industry according to Zachs.

Total's involvement in renewables is much more significant, with hundreds of megawatts built in different markets. The company is active along the entire solar photovoltaic value chain with SunPower and Total Solar, from the production of photovoltaic cells to the development of solar farms or the installation of solar facilities in the industrial/ commercial and domestic segments. 

total

Last year, the Paris-based company pursued its policy of investing in low- carbon businesses by taking an indirect stake of 23% in Eren Renewable Energy. This company, which has been renamed Total Eren, will enable Total to boost its development in solar energy and break into wind power. 

Founded in 2012 by Pâris Mouratoglou and David Corchia, Total Eren has built up a substantial and diversified portfolio of wind, solar and hydroelectric assets representing an installed gross capacity of more than 950 MW in operation or under construction worldwide.

Through partnerships with local developers, Total Eren is currently developing numerous energy projects in countries and regions where renewable energy represents an economically viable response to growing energy demand, such as in Asia-Pacific, Africa and Latin America. Its objective is to achieve a global net installed capacity of more than 3 GW by 2022.  

Total, through Total Eren has a 140MWp solar portfolio in Brazil. Worldwide, it has a 1.1GW renewable energy portfolio.

Earlier this month Total completed the acquisition of a 73.04% stake in Direct Energy SA, a French leading alternative energy player with 550 MW of renewable properties, for about EUR 1.4 billion.