Halliburton Expands Presence in Brazil With New Petrobras CCS Deal

Halliburton HAL and Petrobras PBR are expanding their long-standing relationship through a new contract focused on carbon capture and storage (“CCS”) infrastructure in Brazil. The company has won a contract from Petrobras to drill and complete four onshore wells at the Barra do Furado Station in Quissamã, Rio de Janeiro, for the São Tomé CCS Pilot Project.

The contract covers one vertical injection well and three directional monitoring wells. The project is expected to strengthen its position in Brazil while allowing the oilfield services company to participate in an emerging carbon-management market.

Halliburton to Support Petrobras' São Tomé CCS Project

Under the contract, Halliburton, a Houston, TX-based oil and gas equipment and services company, will provide drilling and completion services for the four wells required for the pilot project. The wells will form an important part of the infrastructure needed to inject and monitor carbon dioxide (CO2) in a saline reservoir.

According to Petrobras’  press release, it expects drilling, well completion and associated infrastructure to be finished by 2028. The company plans to begin the operational phase in 2029, followed by three years of CO2 injection and another three years of reservoir monitoring.

The pilot is designed to capture up to 100,000 metric tons of CO2 annually for three years. Petrobras said the project will test the full chain of technologies involving CO2 capture, pipeline transportation and geological storage in a saline reservoir.

The São Tomé project is particularly significant because Petrobras describes it as the first project in Latin America to integrate CO2 transport by pipeline with storage in a saline reservoir.

New Contract Adds to Halliburton's Brazil Opportunities

The latest award adds to Halliburton's growing activity with Petrobras. In January 2025, Halliburton announced a major three-year contract to provide integrated drilling services across several offshore fields in Brazil. The agreement includes drilling services for development and exploration wells and uses technologies such as the iCruise intelligent rotary steerable system and LOGIX automation and remote operations platform.

Petrobras also awarded Halliburton multiple deepwater contracts in 2025 for vessel stimulation, intelligent completions and safety valves in the Búzios, Séepia and Atapu fields. These contracts are expected to begin in 2026.

Halliburton has also secured a multi-year Petrobras contract for integrated well interventions and plug-and-abandonment services. The 2024 agreement covers nearly two-thirds of Petrobras' intervention and plug-and-abandonment work, further highlighting the importance of Brazil’s market to Halliburton.

CCS Could Create a New Growth Avenue

The São Tomé contract is relatively small compared with large offshore drilling and completion programs, but its strategic importance could be greater than the immediate financial contribution. The project gives Halliburton exposure to CCS infrastructure and technologies at a time when energy companies are seeking ways to reduce emissions from industrial operations.

For Halliburton, participation in the project also complements its traditional oilfield services business. The company has extensive experience with drilling, well construction, completion and reservoir-related technologies, capabilities that can be applied to emerging carbon-storage projects.

Halliburton's experience in technically challenging Brazilian operations could also support its role in the project. The company has previously highlighted its ability to integrate drilling, cementing, fluids, formation evaluation and other services to improve well-construction efficiency in Brazil.

What It Means for HAL Stock

The new Petrobras contract is a positive development for Halliburton because it strengthens an established customer relationship. This also expands the company's participation in Brazil beyond conventional oil and gas activity. However, investors should not expect the four-well CCS project alone to materially change Halliburton's near-term financial results.

The bigger takeaway is the potential for Halliburton to establish an early position in carbon-storage projects. Successful execution of the São Tomé pilot could provide valuable experience in drilling, completing and monitoring wells used for CO2 storage. This may help Halliburton compete for similar projects as CCS infrastructure expands across Latin America and other markets.

At the same time, Halliburton remains heavily exposed to conventional oil and gas activity. Its financial performance will continue to depend largely on drilling and completion activity, customer capital spending and commodity-price trends.

Overall, the Petrobras award represents another positive development for Halliburton in Brazil. While the direct financial impact of the four-well project is likely to be limited, the contract strengthens Halliburton's relationship with one of the world's major energy producers and provides exposure to the growing CCS market. For investors, the project adds another potential long-term growth avenue to Halliburton's established oilfield services business.

HAL's Zacks Rank & Key Picks

Currently, HAL has a Zacks Rank #3 (Hold), while PBR carries a Zacks Rank #4 (Sell).

Investors interested in the energy sector might consider some better-ranked stocks, such as Par Pacific PARR and Delek US Holdings DK, both sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Par Pacific is valued at $3.96 billion. It is a diversified energy company that owns and operates petroleum refineries, logistics assets and retail fuel businesses across the United States. Par Pacific focuses on refining, transporting and marketing fuel products while serving regional markets with reliable energy solutions.

Delek US Holdings is valued at $4.38 billion. It is a diversified downstream energy company engaged in petroleum refining, renewable fuels, asphalt production and logistics operations. Delek US Holdings operates multiple refineries in the United States and is committed to delivering safe, reliable energy while investing in cleaner energy initiatives.

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