Brazil is to join the OPEC+ group of 23 oil-producing countries next month but is adamant that it will not take part in the group’s coordinated output caps.

In making the surprise announcement, CEO of Brazil’s state-run oil firm Petrobras, Jean Paul Prates, made it clear that the firm is against OPEC+ quota regime. Brazil is the largest oil producer in South America at 4.6 million barrels per day (bpd) of oil and gas, of which 3.7 million bpd are crude.

In responding to the question whether Brazil would take part in the production caps, as OPEC+ nations agreed to voluntary cuts approaching two million bpd for early next year, Prates was strident in his response. He declared, “There is no quota….We would never be part of an organisation that imposes quotas to Brazil, Petrobras is a publicly-traded company and we cannot have quotas.”

Brazil’s Mines and Energy Minister Alexandre Silveira told his OPEC+ peers that the was eager to formally enter the group at a future meeting in Vienna, after a technical review of its charter for cooperation. Prates, who in October received OPEC Secretary-General Haitham Al Ghais in Brazil, noted OPEC+ was a group that includes countries with no voting rights and to which production caps are not imposed, which would be the case of Brazil.

He welcomed Brazil’s move to join the group, saying: “Brazil would start participating in the meetings as some kind of observer member, which I think is really nice”. He added that the move would be key to OPEC’s and Brazil’s energy transition efforts.

Brazilian President Luiz Inacio Lula da Silva, speaking at COP28, the UN climate change conference now on in Dubai, remarked: “I think it’s important for us to take part in OPEC+, because we need to convince the countries that produce oil that they need to prepare for the end of fossil fuels.”