Petrobras (PBR Quick QuotePBR - Free Report) is strengthening its international exploration portfolio to replenish oil and gas reserves and expand the production profile. The Brazilian oil and gas company recently signed production-sharing contracts (PSCs) for eight offshore exploratory blocks in Ivory Coast (officially known as Côte d'Ivoire), marking another step in its strategy to pursue promising opportunities along Africa’s Atlantic coast.

The agreements give Petrobras, through its wholly owned subsidiary Petrobras Netherlands B.V. (“PNBV”), a 90% working interest and operatorship in each block. Ivory Coast’s state-owned energy company, PETROCI Holding, will hold the remaining 10% interest. The contracts cover the CI-513, CI-600, CI-601, CI-602, CI-603, CI-605, CI-701 and CI-702 offshore blocks.

Petrobras Expands Exploration Footprint

The new PSCs provide Petrobras access to what the company describes as high-potential exploration areas along the African equatorial margin. This move is strategically important because exploration success is essential for replacing reserves as existing fields mature.

Petrobras has considerable experience in deepwater and ultradeepwater exploration, particularly in Brazil’s prolific offshore basins. The company intends to apply this technical expertise to the Ivory Coast acreage, where it sees geological similarities with the Brazilian sedimentary basins. Petrobras president Magda Chambriard said it expects to use technical capabilities to evaluate the exploration potential of the African Atlantic margin.

For investors, the development represents an opportunity for Petrobras to expand its resource base beyond the traditional Brazilian operations. However, the blocks remain in the exploration stage, meaning any potential reserves, production volumes or financial benefits will depend on future seismic studies, drilling results, commercial discoveries and development decisions.

Africa Becomes a Strategic Exploration Region

The Ivory Coast agreements fit into Petrobras’ broader effort to increase its exposure to new exploration frontiers outside Brazil. In June 2025, the company announced that it had obtained exclusivity to negotiate the acquisition and operatorship of nine offshore exploratory blocks in Ivory Coast. The company ultimately signed contracts for eight blocks.

Petrobras has also been evaluating opportunities elsewhere in Africa. The company has been pursuing exploration opportunities in countries including Ghana, Namibia, São Tomé and Príncipe and South Africa. In February 2026, Petrobras announced the acquisition of a 42.5% interest in Namibia’s offshore Block 2613, where TotalEnergies (TTE Quick QuoteTTE - Free Report) holds an equal 42.5% interest and serves as operator.

The expansion is consistent with comments made by Chambriard in 2025. She told Reuters that Petrobras intended to make Africa the main exploration region outside Brazil as it looked to replenish reserves and support the longer-term production outlook.

Reserve Replacement Remains Important

The latest Ivory Coast agreements come as Petrobras focuses on maintaining its reserve base through exploration in both established and emerging regions. The company’s strategy calls for pursuing new frontiers in Brazil and abroad to diversify its exploration portfolio and support the long-term sustainability of the business.

For an integrated oil and gas company, reserve replacement is an important consideration because production from existing assets naturally declines over time. New discoveries can potentially provide additional resources that may eventually be developed into producing assets.

Petrobras’ strong position in offshore exploration could provide an advantage as it evaluates the Ivory Coast acreage. Its experience in complex offshore environments may also help the company assess prospects and determine whether discoveries can be developed economically.

However, investors should recognize that exploration projects typically involve significant upfront spending and uncertain outcomes. A large exploration position does not automatically translate into commercial reserves or future production.

What Investors Should Watch

The next major catalysts will likely come from Petrobras’ exploration activities and any updates regarding seismic surveys, drilling plans and potential discoveries in the eight blocks. Investors should also monitor the company’s capital allocation as it balances international exploration with the large Brazilian offshore portfolio.

The 90% interest gives Petrobras substantial control over the exploration program but also means that it will bear a large share of the associated exploration costs and risks. PETROCI’s 10% participation provides a local partner, while Petrobras retains operatorship of the blocks.

The company’s growing African portfolio could eventually provide additional sources of reserves and production. Nevertheless, the financial impact of the Ivory Coast agreements is unlikely to be immediate because the assets are still at the exploratory stage.

Bottom Line

Petrobras’ signing of eight PSCs in Ivory Coast expands its international exploration footprint. This move reinforces Africa’s growing role in the company’s long-term strategy. The 90% operating interest gives Petrobras significant control over the blocks, while the location along the African equatorial margin provides exposure to a frontier region that it considers highly prospective.

The development is strategically relevant for Petrobras as it seeks to replenish oil and gas reserves and diversify the exploration portfolio. At the same time, investors should keep in mind that exploration success is uncertain and that meaningful production and cash-flow contributions, if any, would likely require successful discoveries and subsequent development. Therefore, the key factor to watch is whether Petrobras can convert its expanded African exploration position into commercially viable discoveries over the coming years.

PBR's Zacks Rank & Key Picks

Currently, PBR has a Zacks Rank #3 (Hold), while TotalEnergies carries a Zacks Rank #2 (Buy).

TotalEnergies is a global integrated energy company with operations spanning oil, natural gas, LNG, refining and renewable power. The company’s diversified portfolio and growing focus on LNG and low-carbon energy support its strategy to expand across the global energy market.

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