Video: Petrobras Plans to Increase Oil Production and Diversify Its Service Portfolio

Petrobras Unveils Its Five-Year Business Plan, The First Since Jair Bolsonaro’s Election As President Of Brazil. The Future President Projects An Increase In Oil Production And An Ambitious Asset Sales And Debt Reduction Program

Petrobras has unveiled its five-year business plan, the first since Jair Bolsonaro’s election as President of Brazil. The future president projects an increase in oil production and an ambitious asset sales and debt reduction program. The state-owned company announced on Wednesday that it will increase oil production by 5% to 10% in the coming years, to surpass the 3 million barrels per day mark by 2021. In addition, it plans to invest US $ 84.1 billion and sell US $ 26.9 billion in assets by 2023, as well as expand partnerships with other companies. Watch the video of the future President of Petrobras, Roberto Castello Branco, talking a little more about it in the institutional video below:

The production outlook evokes the promises of spectacular advancements made during the previous administration of Brazil’s Workers’ Party. However, these increases did not materialize while the company’s leverage soared.

This time, Petrobras has a much more conservative fiscal outlook. Its goal is to reduce its debt to a level that could be paid off within 1.5 years of cash generation, instead of the more than five years considered in the past. On the other hand, it plans to install 13 offshore oil platforms – eight in 2018 and 2019 – to increase production and cash generation starting next year. As in its previous business plan, Petrobras stated that it wants to completely exit the fertilizer, biodiesel, and ethanol industries, and that asset sales will now include some of its refineries.

These divestments and additional revenues from increased oil sales will allow the company to invest in exploration and production without needing to access international capital markets until 2023, it said. More than 80% of the US $ 84.1 billion investments through 2023 will be allocated to exploration and production.

In comparison, Petrobras invested over US $ 200 billion in the five years leading up to 2014, after years benefiting from a commodities boom and oil prices above US $ 100 per barrel.

On the other hand, Petrobras reported that it intends to emphasize petrochemical products and no longer wishes to abandon the sector. The company stated that it wants to explore the potential of petrochemicals integrated with refining. However, it did not disclose plans for its stake in Braskem.