Petrobras to Propose Cut of Up To 30% in Investment in Five Years

06/24/2015 - 09h11

Petrobras' business plan from 2015-2019 will reduce the company's investments by 27% to 30%. The plan is due to be presented to Petrobras' administrative council on Friday (26).

As Folha has learned, the aim is to present the council with a "more streamlined business plan" which corresponds to the reality currently faced by the company.

Petrobras has been hit hard in recent months by the fall in global oil prices, as well as struggling with financial difficulties resulting from the Lava Jato corruption scandal. To make matters worse, the company's debt is increasing thanks to the increasing value of the dollar.

The new plan should be made available for the market on Monday (29). The previous plan, from 2014 to 2018, forecast investment of US$220.6 billion, or US$44.1 billion a year. Petrobras was unable to maintain these commitments, closing last year with investment of US$35 million, 20% less than planned.

The market is particularly concerned with the fate of the two main refineries currently under construction in Brazil - Comperi, in Rio de Janeiro, and Abreu e Lima, in Pernambuco.

These projects are of fundamental importance for Petrobras, which currently does not refine enough oil to satisfy domestic demand and has to import gasoline from abroad.

The last time results were published, in May, Petrobras president Aldemir Bendine reiterated the company's interest in the refineries, but ratified a decision taken by the previous management to cancel construction of the Premium 1 and 2 refineries, in northeast Brazil.

Petrobras had already indicated that investment was likely to be reduced. In the first quarter of this year, investment stood at US$5.8 billion, a fall of 13% compared to the same quarter of 2014.

This process of divestment - the sale of lesser assets to raise funds for more important projects - is a result of the company's high levels of debt. Net debt reached US$108 billion in the third quarter of 2014, exacerbated by the rising value of the dollar.

Rumors that the plan would be reduced sent Petrobras shares tumbling on the stock exchange.

Translated by TOM GATEHOUSE

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	Dado Galdieri - 11.jul.2013/Bloomberg
	P-61 oil platform, in the bay of Angra dos Reis, in Brazil