Western Hemisphere 2021 Energy Landscape and Outlook

Petrobras will sell its shares in the transport and trading of natural gas sectors. In the downstream area, the company expects to conclude the sale of eight refineries between the end of 2021 and the first semester of 2022. In the pre-salt environment, Petrobras places high hopes in the development of the Buzios field in 2021, which is the largest deepwater field in the world. Expectations for the electric power sector in Brazil in 2021 are primarily around the privatization of Eletrobras, which at this point looks implausible this year. Eletrobras is the largest electricity company in Latin America, responsible for 30% of generation capacity, 44.7% of transmission and 7% of electricity distribution in Brazil. After successive crises and poor management in the electricity sector by the government, the company has absorbed huge losses and needs to pursue private capital to remain afloat. The privatization process, however, faces strong political resistance, particularly from sectors of the Senate, as a large government corporation carries distinct interests for different parties. There are four electricity generation bidding rounds and two rounds for power transmission already confirmed for 2021, as well as the ongoing gradual replacement of fuel oil thermal plants by natural gas plants, renewable or hybrid units. In the renewable energy segment, Brazil remains one of the most promising investment frontiers in the world. The

installed capacity for wind energy in the country is at 16 GW and is expected to reach 18 GW in 2021. There are wind farms parks contracted in the last bidding rounds whose construction have not started, thus bringing the perspective that wind energy capacity should reach 23.5 GW by 2025. The solar energy park is expanding too, exceeding 7.2 GW of installed power. The forecast for 2021 is to reach 10 GW. The high incidence of wind, solar radiation and hydro potential enhances Brazil’s quest to boost the generation of clean and renewable energy in the next decades, which decisively contributes to a low carbon economy. While the oil and gas sector explores the vast Pre-Salt resources, the country maintains a relatively high 46% of green energy generation.

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