Brazilian oil major Petrobras has secured its first sustainability-linked loan as the company seeks to focus on decarbonising its operations.
The five-year, $1.25bn facility was signed with the Bank of China, MUFG and The Bank of Nova Scotia, the Brazilian oil major said.
The terms were not disclosed, but Petrobras will pay a lower interest rate if it meets goals to reduce per-barrel emissions of methane and other greenhouse gases, while it will pay a higher rate if it misses the targets.
Institutional Shareholder Services will function as a third party to monitor the company’s performance.
“This is the first time Petrobras has contracted financing associated with its corporate sustainability targets,” the Rio de Janeiro-based company said.
It added that the move also expands its “liability management strategy by diversifying financing models, in line with the sustainability requirements that are increasingly present in the debt markets”.
The oil producer’s goal is to reduce carbon intensity by 16% in refining operations and 32% in exploration and production by 2025.
“This loan shows that Petrobras is pursuing more challenging goals,” Rafael Chaves, director of institutional relations and sustainability, told Bloomberg.
After a $1.5bn buyback of some of its global bonds, the company’s gross debt is already lower than the $58.6bn reached at the end of the first quarter.
Petrobras has a fleet of 123 vessels made up of owned and chartered tonnage, according to its website.
It owns suezmaxes, aframaxes, product tankers and six LPG carriers, all built after 2011, as well as an anchor-handling tug built in 1976.
In June, it took delivery of the first of three eco-design DP2 suezmax shuttle tankers on long-term charters from Malaysian tanker owner AET.
Petrobras was the largest charterer of suezmax tankers in 2021, according to figures compiled by US-based brokerage Poten & Partners.
Petrobras, which was not even in the top 10 in 2019, jumped from seventh in 2020 to first last year in what was described as a “remarkable achievement” by the broker.
However, in the first six months of 2022, Petrobras has slipped down to third place on the list of top suezmax charterers, behind ExxonMobil and Total.
