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Equinor, Petrobras to Develop Offshore Wind Farm in Brazil

Zacks Equity Research  


    Equinor ASA EQNR teams up with Petrobras PBR to develop the Aracatu wind farm, an offshore wind project off Brazil's southeast coast.

    The Aracatu wind farm, situated 20 kilometers off the Brazilian coast in the Campos Basin, will supply 4 gigawatts (GW) of offshore wind capacity. Equinor and Petrobras are currently assessing the project's environmental feasibility.

    In 2018, Equinor signed a memorandum of understanding with Brazil-based energy major Petrobras to develop the offshore wind energy segment in Brazil. Notably, Equinor filed an application to commence the environmental permitting process for the Aracatu project two years ago.

    Equinor appealed for environmental explorations for six projects in four Brazil states, with 14,370 megawatts currently under examination. Aracatu is the biggest offshore wind development, which Equinor is developing in the country. The remaining projects range between 2 GW and 2.5 GW.

    Equinor started the Ibama license for the Aracatu project, comprising Aracatu I and Aracatu II offshore wind farms. The wind farms are expected to generate adequate power to satisfy the requirements of 2 million homes.

    Brazil currently has 21 GW of wind power capacity, which constitutes about 10% of the country's total power generation. The country has immense potential to be a global leader in the segment. The generation method aligns well with Petrobras' expertise and capability in the maritime environment, particularly in deep and ultra-deep waters.

    Offshore wind farms are one of Petrobras' eco-friendly alternatives, along with the development and production of advanced biofuels. The company also focuses on the development of advanced biofuels, which include jet fuel.

    Company Profile & Price Performance

    Headquartered in Stavanger, Norway, Equinor is one of the leading integrated energy companies in the world.

    Shares of EQNR have outperformed the industry in the past six months. The stock has gained 34% compared with the industry's 33.8% growth.

    Zacks Investment Research Image Source: Zacks Investment Research

    Zacks Rank & Other Stocks to Consider

    Equinor currently flaunts a Zack Rank #1 (Strong Buy).

    Investors interested in the energy sector might look at the following companies that also presently sport a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

    Marathon Oil Corporation MRO reported a first-quarter 2022 adjusted net income per share of $1.02, beating the Zacks Consensus Estimate of 98 cents. MRO's bottom line was favorably impacted by stronger liquid realizations and solid domestic production.

    Marathon Oil lowered its gross debt by $1.4 billion in 2021, comfortably covered by the year's free cash flow of $2.2 billion. It is also important to remember that the company's major debt maturities mostly fall after 2025. There are not that many near-term risks on this front.

    Sunoco LP SUN reported first-quarter earnings of $2.32 per unit, comfortably beating the Zacks Consensus Estimate of 89 cents. The strong quarterly earnings were driven by higher motor fuel and non-motor fuel sales.

    For 2022, Sunoco revised its adjusted EBITDA guidance upward to $795-$835 from the previously mentioned $770-$810 million. In 2021, the metric was $754 million.

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    Marathon Oil Corporation (MRO): Free Stock Analysis Report

    Petroleo Brasileiro S.A. Petrobras (PBR): Free Stock Analysis Report

    Sunoco LP (SUN): Free Stock Analysis Report

    Equinor ASA (EQNR): Free Stock Analysis Report

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