Petrobras may evaluate the possibility of short-term adjustments to its business plan

Mar 18, 2020

Petrobras may evaluate the possibility of short-term adjustments to its business plan, which includes investments and divestments for a period of five years, while the crisis generated by the coronavirus and an oil price war declared by Saudis bring the commodity’s quotations to a minimum. since 2016.

“We are going to assess the need for adjustments to the plan in the short term, but in the medium term we think the situation is back to normal,” said a company source, on condition of anonymity.

For the person, the scenario is still uncertain, and the company even works with a possibility of recovery in oil prices, at the end of the year.

The price of the commodity has already dropped more than 50% this year, and Brent closed on Tuesday below $ 30 a barrel for the first time since January 2016.

“Brent must remain low for the duration of the crisis. Demand fell and Saudi Arabia increased supply, ”said the source.

However, Petrobras understands that there is a possibility of a recovery in prices, if something changes in the price war between Saudi Arabia and Russia.

“In our assessment, oil returns to higher levels by the end of the year … (With) Increase in demand and cut in production,” he said.

Regarding the business plan, the source said, “some milestones can be postponed”, while the world is going through the crisis, “but the work continues, life goes on”.

Petrobras’ plan foresees divestments of between 20 billion and 30 billion dollars for the period 2020-2024, with the highest concentration in the years 2020 and 2021, when the state-owned company plans to sell eight refineries.

With regard to investments, Petrobras approved at the end of last year 75.7 billion dollars under the plan for the period from 2020 to 2024, with a 10% reduction compared to the previous program.

Most of the investments are foreseen in Exploration and Production.

For this year, considering the annual average projected in the plan, Petrobras’ Exploration segment could receive contributions of US $ 2.3 billion, but experts from Wood Mackenzie told Reuters to expect a reduction in the face of falling prices.

In the country, considering all companies, there should be a cut of 300 million to 600 million dollars in investments planned for oil exploration in 2020, according to the consultancy.

Before the collapse of prices, Wood Mackenzie foresaw contributions of US $ 3 billion in Brazil this year, including expenses from other oil companies, such as the Anglo-Dutch company Shell, Norwegian company Equinor, among others.

Sought, Petrobras did not immediately comment on the matter.

Source: TNPetroleo

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