TotalEnergies' Strategic Stake Shift in Brazil's Lapa Field: A High-Return, Low-Carbon Play for 2025 and Beyond

TotalEnergies (TTE) has executed a masterful portfolio optimization move in Brazil, swapping non-core assets for a larger stake in one of the country's most promising oil projects. The company's recent agreement to increase its operated interest in the Lapa offshore field to 48%—while divesting from the Gato do Mato project—signals a sharp focus on high-margin, low-carbon energy assets. With a production boost of 25,000 barrels per day (b/d) by year-end 2025 and a strategic pivot toward Brazil's pre-salt basins, TotalEnergies is positioning itself as a resilient, diversified energy player primed for long-term gains.

The Lapa Play: Low-Cost, High-Impact Oil
The Lapa field, located in Brazil's Santos Basin, is a deepwater pre-salt asset with exceptional scalability. By acquiring an additional 3% stake from Shell Brasil, TotalEnergies now holds the largest equity position in the field, alongside Shell (27%) and Repsol Sinopec (25%). This move consolidates operational control, enabling TotalEnergies to accelerate development of the Lapa South-West tie-back project—a $1 billion investment expected to lift total production to 60,000 b/d by 2025.

The project's economics are compelling. Leveraging existing infrastructure—such as the Lapa FPSO, operational since 2016—minimizes capital expenditure and reduces emissions. Javier Rielo, Senior Vice President of TotalEnergies' Americas division, emphasized the strategic fit: “Lapa's pre-salt reserves are among Brazil's lowest-cost oil projects, and this stake increase strengthens our ability to drive efficiency and sustainability.”

Why Brazil's Pre-Salt Basins Matter
Brazil's pre-salt reserves—estimated at over 50 billion barrels—represent one of the world's last great oil frontiers. The Santos Basin, where Lapa is located, has been a crown jewel for TotalEnergies, contributing 153,000 barrels of oil equivalent per day in 2024. The Lapa South-West development aligns with the company's broader strategy to focus on low-emission, long-lived assets.

The scalability of Lapa is unmatched. By connecting three new wells to existing infrastructure, TotalEnergies avoids the high costs and carbon footprint of greenfield projects. This approach also reduces execution risks, as the company has decades of operational expertise in Brazil.

Strategic Divestment: Out With the Non-Core, In With the Future
The swap of TotalEnergies' 20% non-operated interest in Gato do Mato—a smaller, more complex project—for a larger stake in Lapa reflects a disciplined portfolio management philosophy. Non-operated positions carry less control and lower returns, while Lapa's operated status ensures TotalEnergies can maximize value extraction.

This trade-off also frees capital for higher-potential ventures. Brazil's pre-salt fields are projected to grow production by 15% annually through 2030, and TotalEnergies' expanded role in Lapa positions it to capture a larger share of this growth.

The Renewable Hedge: 12GW of Low-Carbon Growth
While TotalEnergies is doubling down on oil in Brazil, it's equally committed to renewables. Its partnership with Casa dos Ventos to develop a 12GW renewable energy portfolio—spanning wind, solar, and battery storage—demonstrates a balanced approach to energy transition. This hybrid strategy mitigates risks tied to oil price volatility while aligning with global demand for cleaner energy.

Regulatory Risks? Mitigated by Experience and Partnerships
Brazil's regulatory environment remains a concern, but TotalEnergies' 50-year presence in the country—and its 11 exploration licenses—provide a buffer. The company's collaboration with Petrobras on AI-driven efficiency improvements and its adherence to local content rules ensure smooth execution.

Investor Takeaway: A Dual-Engine Growth Story
TotalEnergies is executing a textbook portfolio reallocation: cutting ties with marginal assets while doubling down on crown jewels like Lapa. The 25,000 b/d production boost and 12GW renewables pipeline create a dual-engine growth story, insulated by Brazil's pre-salt potential and global energy demand.

For investors seeking exposure to a company that combines fossil fuel resilience with renewable ambition, TotalEnergies is a standout. With a 48% stake in Lapa's low-cost oil and a renewables pipeline that reduces long-term risk, TTE offers a compelling entry point for long-term gains.

Act now: Brazil's energy renaissance is here, and TotalEnergies is leading the charge.