Petrobras aims to raise oil production from 8% to 10% to about 2.3 million barrels per day (bpd) in 2019 and reduce debt by another $ 10 billion next year, the company’s chief financial and investor relations officer, Rafael Grisolia, told Reuters.
The world’s most indebted oil company is on track to reduce its debt to $ 69 billion by the end of this year, despite falling below the $ 21 billion divestiture goal (2017-2018 biennium), the executive said in an interview. New York on Friday.
The company significantly reduced its net debt from $ 106 billion in 2014, when it set aside large amounts to finance the development of huge pre-salt oil fields.
Subsequently, Petrobras lost investor confidence as oil prices fell, a corruption scandal hit the company and losses in the supply area increased.
Petrobras plans to reduce its net debt by another 10 billion dollars by 2019 to reach a 2 times ratio of net debt to Ebitda, he said.
The company will continue to cut debt until the net debt / Ebitda ratio reaches 1 to 1.5 times, said the executive, which would put the company in line with its oil industry peers around the world.
“If you look at our direct competitors and peers like Chevron, Exxon and BP, we need to look for a lighter capital structure,” Grisolia said.
The company is expected to reach a ratio of 1.5 times in 2020 as part of Petrobras’ next five-year business plan, he said, although this depends on international oil prices and other variables such as the exchange rate.
In the next five to six years, once the company has achieved debt restructuring targets, Petrobras may consider foreign investments to facilitate exports resulting from increased output from the pre-salt fields, he said.
The company may invest in overseas terminals to receive liquefied natural gas (LNG), Grisolia said. That would help Brazil export more gas, he added.
Exxon Mobil, BP and Shell are among the companies planning to invest billions of dollars in developing deepwater reserves in Brazil.
Brazil is expected to account for a large part of the increase in global oil and gas production from countries not members of the Organization of Petroleum Exporting Countries.
Oil Prices Help
The company expects its oil output to increase by 8% to 10% next year, from around 2.1 million barrels per day (bpd) in 2018, Grisolia said. This should contribute to revenue growth, the CFO said.
Oil prices have soared to a three-and-a-half-year high recently, as global offerings have tightened.
Higher oil prices than those estimated by the company in 2018 raised revenue and allowed Petrobras to meet its debt reduction target, he said. That offset $ 7 billion in asset sales that Petrobras expects to receive this year, the executive added.
The company has already received $ 5 billion in sales and will receive another $ 2 billion by the end of the year, he said.
“All disinvestments and divestment money will help, but we do not necessarily need them to reach the $ 69 billion target by the end of the year,” he said.
In May, a protest by truckers across the country against rising diesel prices paralyzed Latin America’s largest economy and forced the government to lower diesel prices through tax cuts and subsidies.
That hurt Petrobras’ share price as investors worried about the company losing money again to subsidize fuel sales.
The company expects to receive from 2 billion to 2.5 billion reais of subsidies from the country’s oil regulator, the ANP, within two weeks, to offset its holding of quotations at refineries, Grisolia said.
Subsidies have made it less profitable for the private sector to import diesel, he said, but some external purchases of the product continue, and he does not predict any fuel shortages.