Brazil’s oil output gets a 31% boost in Mero Field as Petrobras starts Mero-4 FPSO

The FPSO Alexandre de Gusmão, a state-of-the-art floating production storage and offloading unit, began operations in the Mero field of Brazil’s Santos Basin, more than two months ahead of its scheduled startup. With a nameplate oil processing capacity of 180,000 barrels per day and gas compression capability of 12 million cubic meters per day, the unit marks a critical expansion in Brazil’s pre-salt output capacity.

Operated by Petrobras and its consortium partners under the Libra Production Sharing Contract (PSC), this development lifts Mero’s total installed production capacity to 770,000 barrels per day—a 31% increase that significantly strengthens Brazil’s global standing as a low-carbon offshore energy supplier.

Why Is the FPSO Alexandre de Gusmão Launch So Significant for Brazil’s Oil Sector?

The early deployment of Mero-4 is being hailed as a milestone not only for Petrobras but for the broader Brazilian oil and gas industry. The FPSO is the fifth and final planned full-scale production unit under the Libra PSC, which governs the Mero field development in the pre-salt polygon.

Petrobras, with a 38.6% operating stake, leads the Libra Consortium, which includes Shell Brasil and TotalEnergies (19.3% each), CNPC and CNOOC (9.65% each), and Pré-Sal Petróleo S.A. (PPSA), the government’s representative entity, holding 3.5%. The field lies approximately 180 kilometers offshore Rio de Janeiro in water depths of 2,000 meters—demanding sophisticated subsea infrastructure and digitalized reservoir management.

The Mero field is one of the world’s most prolific carbonate reservoirs. Its high flow rates, large resource base, and favorable API crude quality position it as a core component in Brazil’s upstream strategy. Since the 2013 signing of the Libra PSC, successive field phases have been brought online under tight deadlines. The start of Mero-4 confirms Petrobras’ ability to execute mega-projects within capital discipline frameworks.

What Is the Technical Scope of the Alexandre de Gusmão FPSO?

Chartered by Petrobras from SBM Offshore under a 22.5-year lease agreement, the Alexandre de Gusmão FPSO is equipped with next-generation automation and subsea connectivity. It will be linked to 12 wells—five for oil production, six for water/gas injection, and one convertible well that will initially produce oil and later transition to gas reinjection.

The FPSO includes Petrobras’ “intelligent well completion” technology, enabling remote reconfiguration of production zones. This system provides greater responsiveness to reservoir behavior and optimizes output over time. In addition, the unit has been built with future compatibility for Petrobras’ patented HISEP (High Pressure Separator) subsea CO₂ separation system, which is still undergoing qualification. HISEP would enable early removal and reinjection of CO₂, reducing surface processing and greenhouse gas emissions.

With gross output capacity of 180,000 barrels per day, this FPSO ranks among the largest offshore oil production vessels globally, rivaling major platforms in the U.S. Gulf of Mexico, West Africa, and the Middle East.

How Will Mero-4 Affect Brazil’s Overall Oil Production?

The addition of Mero-4 lifts the Mero cluster’s total capacity to 770,000 barrels per day, distributed across five FPSOs: Pioneiro de Libra (early production system), FPSO Guanabara (Mero-1), FPSO Sepetiba (Mero-2), FPSO Marechal Duque de Caxias (Mero-3), and now Alexandre de Gusmão (Mero-4).

Petrobras’ current average production, across both pre-salt and post-salt basins, hovers around 2.9 million barrels of oil equivalent per day. Pre-salt fields, which account for more than 75% of Brazil’s oil output, remain the cornerstone of its five-year plan targeting output above 5 million barrels per day by 2030.

Mero alone, when fully ramped up, will contribute nearly 15% of total Brazilian oil production. This makes it a pivotal asset not just for Petrobras, but for the entire supply ecosystem, including FPSO leasing firms, offshore equipment providers, and Brazilian shipyards.

How Are Institutional Investors Reacting to Mero-4’s Early Launch?

Investor sentiment toward Petrobras and its consortium partners has remained generally positive, with the Mero-4 early startup seen as a testament to operational discipline and improved capital efficiency. Petrobras shares, listed on the B3 and NYSE, have posted modest gains over the past week amid news of project milestones and stable crude prices.

Institutional inflows have tilted toward Petrobras in recent sessions, with Brazilian domestic investment funds increasing exposure to energy stocks. Foreign Institutional Investors (FIIs), who have been more selective in their allocations post-2022 volatility, are gradually re-engaging, drawn by Petrobras’ consistent dividend yields and capital return strategy. Shell and TotalEnergies have each flagged Mero as a cornerstone in their upstream growth commitments announced during Capital Market Day 2025.

Analysts noted that the early start of Mero-4 validates Petrobras’ leaner, more focused upstream strategy under CEO Jean Paul Prates. The approach, which emphasizes agile execution and capital discipline, is increasingly seen as a model for national oil companies navigating both energy transition goals and shareholder return pressures. Some institutional commentary has also pointed to improved risk-adjusted returns compared to more politically volatile projects elsewhere in Latin America.

How Does Mero-4 Compare to Other Global Deepwater Developments?

Compared to other recent mega-projects such as ExxonMobil’s developments in Guyana or TotalEnergies’ Tilenga project in Uganda, Mero distinguishes itself through speed of execution, low breakeven costs, and early decarbonization integrations.

With a post-tax breakeven estimated at $35–$40 per barrel, the Mero field is one of the most cost-competitive in the offshore segment. Moreover, its carbon intensity—thanks to full gas reinjection and future HISEP deployment—is substantially lower than legacy projects in Angola, Nigeria, or the North Sea.

Brazil’s regulatory predictability, local content incentives, and robust export infrastructure give it an edge in attracting long-term upstream investment. Notably, Petrobras continues to be one of the few NOCs globally that actively co-develops with IOCs in high-capex fields without losing operational control.

What Is the Forward Outlook for Petrobras and the Libra Consortium?

While the initial FPSO rollout under the Libra PSC is now complete, Petrobras has indicated that future optimization projects are under review. These include reservoir extension plans, tiebacks to existing FPSOs, and possibly a sixth production unit depending on reservoir performance and fiscal incentives.

Petrobras is also likely to focus on reducing scope 1 and 2 emissions across all operations, a core requirement under the company’s updated ESG roadmap. That includes scaling up the use of CO₂ reinjection technologies, electrification of offshore platforms, and leveraging digital twins for performance monitoring.

Shell and TotalEnergies, on their part, are using Mero-4 as a case study for new FPSO-based projects in Namibia, Suriname, and the Gulf of Mexico. Both companies see Mero as representative of a new archetype: high-yield, fast-track, low-carbon barrels.

Mero-4 Strengthens Brazil’s Role in Global Energy Security

The successful early startup of the Alexandre de Gusmão FPSO reinforces Brazil’s emergence as a vital pillar in global offshore oil supply. It showcases Petrobras’ capability to execute complex deepwater projects under budget and ahead of schedule, even amid a rapidly evolving global energy landscape.

For institutional investors, the Mero-4 launch signals Petrobras’ ability to combine profitability with sustainability. As upstream M&A activity continues globally, particularly in offshore segments, Brazil’s model — anchored in PSCs, stable partners, and engineered emissions control — could offer a benchmark for future developments worldwide.