Petrobras Must ‘ tighten Its Belt’ And Review Boosted Dividends After Oil Drop And Debt Increase, Signals State-Owned Company’s President

Oil Price Drop And Debt Rise Lead Petrobras To Change Strategy: New President Indicates Cuts, And Extra Dividends Depend On Surplus Cash

Petrobras signaled a significant change in its profit distribution policy. The new president, Magda Chambriard, stated that the company will need to “tighten its belts.” The reason is the drop in oil prices, which is already impacting the ability to pay extraordinary dividends to shareholders.

Pressure On Dividends

In 2024, the state-owned company distributed R$ 75.8 billion in dividends, of which R$ 20 billion were classified as extraordinary.

The federal government, the company’s largest shareholder, received 28.7% of this total. This policy generated internal tensions, especially between then-president Jean Paul Prates and Minister Alexandre Silveira, culminating in Prates’ exit.

The reality is now different. With the price of a barrel of oil hovering around US$ 60, analysts believe that the times of high dividends may have come to an end.

Spending And Priority Adjustment

During a conference call, Magda Chambriard emphasized that it will be necessary to adjust spending and control investments. Extraordinary dividends will only be paid when there is surplus cash, unlike ordinary dividends, which follow a formula based on the company’s financial health.

Fernando Melgarejo, the chief financial officer, confirmed that the dividend policy will be reassessed. According to him, everything will depend on cash flow, the volume of investments, and available liquidity.

Difficulties Increase With Debt

In addition to low oil prices, Petrobras faces another problem: a 28% increase in net debt. This further reduces the possibility of passing high profits to shareholders.

Sidney Lima, from Ouro Preto Investimentos, assesses that cash generation is under pressure, making the distribution of extra dividends in 2025 unlikely.

João Daronco, from Suno Research, also believes that the scenario has become tighter and views the continuation of generous payment policies with skepticism.

Possible Paths For Petrobras

Pedro Galdi, from AGF, notes that the barrel price below US$ 65 keeps pressure on the state company. He highlights the importance of OPEC decisions for price behavior. According to him, international agreements can influence supply and bring some relief.

At the moment, Petrobras is trying to find a new balance. The challenge is to meet shareholder expectations while ensuring the resources needed to maintain its investments and operations in the future.

With information from Diário do Povo.

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