By Victor Ezeja
The proposed return of Petrobras to Nigeria, as discussed during President Bola Tinubu’s state visit to Brazil earlier this week, is seen as a significant development with far-reaching implications for Nigeria’s oil and gas industry.
This comes five years after it exited joint venture activities in the country. The deal is part of broader efforts to strengthen ties between Nigeria and Brazil.
It followed the signing of five strategic Memoranda of Understanding (MoUs) between Nigeria and Brazil to strengthen trade, diplomacy, science, aviation, and finance cooperation.
President Tinubu had, during a joint press conference in Brasília during the state visit, said the return of Petrobras would reignite economic cooperation in the energy sector between the two countries.
The Nigerian leader, who commended Brazil’s president, Luiz Inácio Lula da Silva, for agreeing to facilitate the deal, expressed optimism that it would be successful.
“We have the largest gas repository. So I don’t see why Petrobras doesn’t join as a partner in Nigeria as soon as possible,” Tinubu stated.
The Minister of Foreign Affairs had said in May that the country was in discussions with the company regarding the exploration of its deepwater oil acreage.
However, given Petrobras’s history of massive corruption—primarily through the Operation Car Wash (Lava Jato) scandal—this deal carries both opportunities and substantial risks for Nigeria.
The South American country’s oil giant was at the center of the Operation Car Wash scandal, which involved billions of dollars in kickbacks, bribes to executives and politicians, and collusion with contractors to overcharge the company.
This scandal led to convictions of high-level executives and politicians, including President Luiz Inácio Lula da Silva.
While Petrobras has taken steps to address corruption (such as governance reforms and settlements), its reputation remains tainted by the scale of the scandal and its role in destabilizing Brazil’s economy and politics.
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Nigeria’s pursuit of a deal with Petrobras is perceived in some quarters as aligning with a historically corrupt institution, undermining the country’s efforts to improve its own governance and anti-corruption image. This is particularly sensitive given Nigeria’s longstanding struggles with corruption in its oil sector.
Economic Implications of Petrobras Return
Experts have stated that Petrobras’s return could bring significant investment and technical expertise to Nigeria’s deepwater oil and gas reserves, which are still underdeveloped despite their potential.
Tinubu’s government has continued to harp on boosting production and attracting foreign investments in various sectors, including oil and gas.
Speaking in an interview with Pinnacle Daily, energy expert, Mr Ikechukwu Okafor said that though the state-owned oil company has a history of corruption, it has significant expertise in deep offshore oil exploration and would best play in Nigeria’s offshore to boost oil production in the country, not small onshore acreages that other IOCs are divesting from.
Okafor, a petroleum engineer who retired as a director at the NNPC, said the most important thing is to have strong institutions to reduce corruption to the barest minimum.
He said there is a need for total value reorientation in Nigeria to end endemic corruption, stressing that it is done in collaboration, either by individuals or agencies managed by Nigerians, not foreigners.
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“The most important thing is that if they come to Nigeria, we must put things in place to be able to do hydrocarbon accounting, to be sure that what is produced is what is accounted for. We can’t bring Ghanaians to come and manage our oil production accounting,” Okafor stated.
“Petrobras has quite tremendous experience in deep offshore,” he added.
Also commenting on the move, Vice Chair of the African Energy Council, Dr Chinnan Dikwal, said the return of Petrobras to Nigeria would mark a significant shift in oil production in the country.
According to him, Petrobras left Nigeria at a time of regulatory uncertainties in the country’s oil and gas industry. “The regulatory framework was not very clear,” he said, adding that today, those issues are no longer in place with the enactment of the Petroleum Industry Act (PIA).
The energy expert cited the Executive Order signed by President Tinubu last year, which aimed at ensuring efficiency in the oil and gas industry.
He also stated that Petrobras has the capacity to operate deep-water oil exploration and curb the cost of production, boosting revenue.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
