Petrobras accelerates restructuring and focus on pre-salt with the pandemic

July 13, 2020

The new coronavirus pandemic accelerated Petrobras’ strategy of concentrating efforts on the pre-salt layer. The state-owned company, which had already been selling subsidiaries, announced plans in the last three months to reduce by 34% the number of employees (from 45,500 to 30,000), to close nine commercial buildings and leave half of the employees in the administrative area in a home office regime. , even after the end of the pandemic.

The change follows a model already adopted by other major world oil companies in the last 20 years, which sought to concentrate their activities on the most profitable businesses.

The new strategy causes a real reorganization around the company, affecting from the supply chain of specialized equipment to the service network, such as restaurants.

It should also expand competition and pave the way for new opportunities in the private sector for supplier companies.

Reopening without customers

For specialists, the downsizing of Petrobras is positive and started well before the pandemic, after the discovery of the corruption cases revealed by Operation Lava-Jato.

In the last decade, the state-owned company lost more than 20% of its market value, which went from R $ 380 billion to the current R $ 298 billion.

For suppliers, however, it will be necessary to review the strategy and seek to diversify operations in new segments and even look for alternatives abroad to continue growing.

For service providers, however, the reality is a little tougher. The neighborhood of Cidade Nova, in Rio, was once considered a gold mine by investors. It now has closed at least 14 establishments, affected by the pandemic and the prospect of a more modest return, with fewer customers, after the shrinkage of the state company and other companies in the vicinity.

Ricardo Wandeveld reopened OHOS Café Carioca, in Cidade Nova, but customers have not yet returned:

– Five years ago, Cidade Nova became the goose that laid the golden eggs with the arrival of Petrobras University, BR Distribuidora, ONS (National Electric System Operator) and the Olympic Committee. But things started to go backwards – said Wandeveld, recalling that BR Distribuidora has also reduced its staff since its privatization last year.

Luciane Quintal Faria, from Curto Café Rosário, says that, without the expected return of large companies, trade will continue to suffer:

– We don’t know what the future will be like. Companies like Petrobras have signaled that they can definitely adopt a home office and that is bad.

Behind the change in the oil and gas supply chain scenario is the sale of Petrobras’ assets, whose goal is to dispose of up to US $ 26.9 billion by 2023.

Adyr Tourinho, president of ABESPetro, which represents 85% of the contracts for goods and services in oil and gas, recalls that a working group was created to seek ways to reduce the impact of the crisis.

More competition

He cites the revitalization of smaller fields, which may be a short-term solution to maintain the activity and installed capacity of the goods and services industry:

– We are discussing possible solutions together for a more favorable business environment for the exploration and production sector. The moment has been complex and requires joint efforts to overcome the challenges. Post-salt fields and marginal fields require low operating costs to be economically viable. Therefore, we understand that companies with smaller structures have better conditions.

The search for new opportunities, however, is affected by the reduction in oil prices in the international market due to the pandemic. Study by consultancy Wood Mackenzie foresees a reduction in investments between 20% and 30% this year in Brazil in the oil sector.

In the exploration area alone, Marcelo de Assis, the company’s head of Latin America research, points out that there will be US $ 1 billion less in investments, with the reduction in drilling from 21 to 11 wells this year:

– The reduction in Petrobras’ operations will create a challenging environment for suppliers. You also have a postponement of projects for the coming year.

For Marcus D’Elia, managing partner of Leggio Consultoria, the biggest challenge for suppliers is being able to compete with international companies:

– The assets sold by Petrobras will continue to operate and will continue to demand services and equipment. The biggest challenge is external competition. Companies that have the strength and capacity to at least match the profile of international companies will survive.

Marcio Félix, former Petroleum Secretary of the Ministry of Mines and Energy and president of the consulting firm Energy Plataform (EnP), says that the sale of assets of the state company generates investment and business opportunities for the supply chain.

He mentions the refining and gas segments. The latter, in the wake of the expectation of voting on a regulatory framework in Congress:

– We are reaching a new balance point. That model of Petrobras carrying the entire sector no longer exists

Chance for investment

The expert and former general director of the National Petroleum Agency (ANP) Décio Oddone considers that the exit of Petrobras from various sectors is healthy, allowing the entry of private investors in areas previously dominated by the state company. According to him, Petrobras was unable to invest in all segments.

– Petrobras chose to invest in the pre-salt, and correctly started selling mature fields, refineries, gas assets so that others can invest and, with that, have an industry investing in Brazil – said Oddone, citing the onshore Azulão gas field in Amazonas, discovered 20 years ago by Petrobras that, when sold three years ago to Eneva, is receiving an investment of R $ 1.9 billion.

Roberto Ardenghy, director of Institutional Relationship at Petrobras, says that the change in strategy does not mean weakening:

– We are doing portfolio management. Last year, we paid R $ 70 billion for the excess of the transfer of rights with Búzios and Itapu. We are investing more than divesting. We are more focused on deep water. It is natural that suppliers end up benefiting in the long run. We will buy equipment and boats on top of the projects.

Source: O Globo

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