Petrobras to Boost RNEST Refinery Processing Output With Train 2

Petrobras PBR, Brazil's leading state-owned oil and gas company, is undertaking a significant expansion project at its Abreu e Lima Refinery (“RNEST”) located in Ipojuca, Pernambuco. This expansion, known as Train 2, will double the refinery's current processing capacity, pushing it to 260,000 barrels per day (“bpd”) by 2029. The company is investing approximately 12 billion reais to complete Train 2, along with essential maintenance on the existing Train 1. This ambitious project highlights Petrobras' commitment to enhancing Brazil's domestic fuel production and reinforcing national energy security.

The Significance of the Train 2 Expansion

Abreu e Lima Refinery plays a critical role in Brazil's energy landscape. The addition of Train 2 will increase the refinery’s processing capacity and improve the overall output of refined petroleum products. This includes an estimated boost of 88,000 bpd of S-10 diesel, which meets stringent environmental regulations. The expansion will also facilitate greater production of gasoline, liquid petroleum gas (“LPG”) and naphtha. The enhanced production will significantly reduce Brazil’s reliance on fuel imports, which have been a long-standing challenge for the nation’s energy self-sufficiency.

By increasing local production, Petrobras aims to support the Brazilian economy, reduce foreign exchange dependency and strengthen its competitive positioning in the global energy market. With the completion of Train 2, the refinery will be able to meet up to 17% of Brazil's national diesel demand. This boost will be vital for the country’s energy security and economic resilience in the face of fluctuating international oil prices.

Job Creation and Economic Impact of the Expansion

Petrobras' expansion of Abreu e Lima Refinery will have a profound impact on the local and national economy. The entire project is expected to generate approximately 15,000 direct and indirect jobs throughout its duration. As of now, around 5,700 workers are actively engaged in the construction efforts at the refinery site. This influx of employment opportunities will bring significant benefits to Pernambuco, fostering economic growth and providing a steady stream of income for local communities.

The jobs created by the expansion will span various sectors, from construction and engineering to project management and environmental protection. Petrobras is also contributing to the development of local infrastructure and improving the socio-economic conditions in surrounding municipalities. This is a key element of the company’s strategy to ensure that its energy projects provide long-term benefits to the communities they serve.

Sustainability and Environmental Responsibility

Petrobras has committed to incorporating sustainable practices into the RNEST expansion project. In addition to the increase in processing capacity, the company has taken proactive measures to mitigate environmental impact. Last year, Petrobras launched the Atmospheric Emissions Reduction Unit (“SNOX”) at the Abreu e Lima refinery. This system significantly reduces harmful emissions, aligning with the company's broader goal of achieving environmental sustainability.

Furthermore, Petrobras has committed to social and environmental initiatives in 29 communities across seven municipalities surrounding the refinery. These initiatives are aimed at improving local living standards, enhancing public services and promoting sustainable development in the region. It is ensuring that the growth of its operations does not come at the expense of the local environment or the well-being of surrounding communities.

Investment and Strategic Plans

The expansion of the Abreu e Lima Refinery is a key part of Petrobras’ long-term strategy to maintain its leadership in Brazil’s oil and gas sector. The company’s board of directors recently approved the Business Plan 2026–2030, which outlines significant investments in refining, exploration and renewable energy initiatives. Although the investment budget for this period has been reduced by 2%, totaling $109 billion (581.2 billion reais), Petrobras remains focused on enhancing its refining capacity and expanding domestic fuel production.

As global energy dynamics shift toward cleaner and more sustainable energy sources, Petrobras is also investing in technologies to improve refinery processes and reduce carbon emissions. The company's focus on environmental responsibility, combined with its strategic investments in refining capacity, positions it to play a critical role in Brazil's energy future.

Conclusion: Strengthening Brazil’s Energy Security

The expansion of the Abreu e Lima Refinery with the addition of Train 2 represents a major milestone in Petrobras’ mission to enhance Brazil’s energy independence. By increasing the refinery’s capacity, it is not only boosting fuel production but also creating thousands of jobs and supporting regional economic development. The commitment to sustainability and environmental stewardship further demonstrates the company’s dedication to balancing industrial growth with social responsibility.

With the completion of this project by 2029, Petrobras will reinforce its position as a key player in Brazil’s energy sector and ensure that the country can meet its growing fuel demands, reduce imports and secure its energy future for generations to come.

PBR's Zacks Rank & Key Picks

Currently, PBR has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like USA Compression Partners USAC, Oceaneering International OII and Par Pacific PARR, which sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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