Petrobras Boosts Its Profits by Focusing on Deepwater Exploration

Written by Paulo Nogueira

Published on 05/08/2019 at 01:00

Updated on 04/08/2019 at 13:07

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“We Are Gradually Eliminating Our Participation in Businesses That Have Been Bleeding Petrobras’ Cash for Several Years,” Says the President of the Oil Company.

The strategy is helping Petrobras cut costs while raising billions of dollars through asset sales. Petrobras’ exclusive focus on deepwater exploration is yielding positive results for Brazil.

With its exploration focus along the coast of Rio de Janeiro, Petrobras continues to sell assets: this year, the oil company raised US$ 8.6 billion from the sale of the TAG pipeline unit and US$ 2.3 billion by selling a majority stake in BR, the largest fuel distributor in the country.

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In a message to investors, the state-owned company’s president, Roberto Castello Branco, wrote:

“WE ARE GRADUALLY ELIMINATING OUR PARTICIPATION IN BUSINESSES THAT HAVE BEEN BLEEDING PETROBRAS’ CASH FOR SEVERAL YEARS.”

The strategy helps the oil company cut costs while raising billions of dollars through asset sales.

On Thursday, August 1st, Petrobras reported a net income of R$ 18.9 billion in the second quarter of this year.

The result from Petrobras represented an increase of 87% compared to the same period in 2018.

Castello Branco stated that the company will initiate the sale process of four additional refineries next month, adding to the four already for sale. Meanwhile, the oil company has reduced its investment target for the year from US$ 16 billion to a range between US$ 10 billion and US$ 11 billion.

Lower production costs are occurring at a time when Petrobras’ divestment program is making it more challenging for the state-owned company to meet growth targets, as the company has been selling producing fields.

With Petrobras committed to more asset sales, meeting the targets will depend on the ability to contain the decline rates in the mature fields of the Campos Basin.

Petrobras Boosts Its Profits by Focusing on Deepwater Exploration

“We Are Gradually Eliminating Our Participation in Businesses That Have Been Bleeding Petrobras’ Cash for Several Years,” Says the President of the Oil Company.

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