12.01.2016, 16:12
Petrobras slashes investment, production target
OREANDA-NEWS. Brazil's state-controlled Petrobras has slashed around $32bn in capital expenditures from its already diluted $130.3bn 2015-19 business plan and trimmed this year´s oil production target.
The company now plans to produce 2.145mn b/d of oil, including crude and NGLs, in Brazil in 2016, down from 2.185mn b/d under the previous plan.
"These adjustments are intended to preserve the basic goals of deleveraging and generation of shareholder value…in light of new oil price and exchange rate levels," Petrobras said.
The company reiterated that sub-salt production remains its priority.
Under the new, leaner business plan, Petrobras plans to invest $98.4bn through 2019. Around $80bn, or 81pc, of that amount is earmarked for upstream projects, down from $108.6bn, or 83pc of the total, under the initial 2015-19 plan announced in June.
The adjusted allotment for downstream, gas and energy, and other areas is now $18.4bn, down from $21.7bn under the initial plan.
Petrobras produced 2.181mn b/d of oil in Brazil in 2015, slightly exceeding its goal of 2.125mn b/d, or 4.5pc growth over 2.034mn b/d produced in 2014.
The company did not disclose domestic oil production goals beyond 2016, but its 2.8mn b/d target for 2020, down sharply from an original 4.2mn b/d, could also be scaled back in light of the investment cuts.
In October 2015, Petrobras eliminated around $11bn from planned investment spending for 2015-16. The company missed its $25bn investment target for 2015 by $2bn, but has bumped up planned spending for this year to $20bn from a previous $19bn, down from an initial $27bn.
Petrobras plans to fund the short-term investments through cost-cutting and extensive divestitures.
The company cut $1bn in operating expenses in 2015 and had planned to trim another $6bn in 2016. The reduction in operating expenses for this year is now under review, the company says.
Petrobras reached its $700mn divestment goal for 2015, and plans to unload $14bn in upstream, downstream and midstream assets this year. Among the assets on the block are its units in Argentina and Chile.
The firm plans to generate an additional $42.6bn in asset sales and corporate reorganizations in 2017-18.
Petrobras has reduced its oil price assumption to $45/bl from an earlier $55/bl for 2016, and has adjusted its currency exchange rate assumption to R4.06/$ from R3.80/$.
An ongoing political crisis stemming from a widespread investigation into systemic corruption at Petrobras has weighed on the Brazilian real for more than a year. The depreciation of the currency is particularly problematic for Petrobras, which has around $100bn in dollar-denominated debt.
Petrobras says it has around $25bn in financing options now available, and is considering more upstream platform sale and leaseback deals. Financing secured by future oil production is also among the funding deals now under consideration.
The company now plans to produce 2.145mn b/d of oil, including crude and NGLs, in Brazil in 2016, down from 2.185mn b/d under the previous plan.
"These adjustments are intended to preserve the basic goals of deleveraging and generation of shareholder value…in light of new oil price and exchange rate levels," Petrobras said.
The company reiterated that sub-salt production remains its priority.
Under the new, leaner business plan, Petrobras plans to invest $98.4bn through 2019. Around $80bn, or 81pc, of that amount is earmarked for upstream projects, down from $108.6bn, or 83pc of the total, under the initial 2015-19 plan announced in June.
The adjusted allotment for downstream, gas and energy, and other areas is now $18.4bn, down from $21.7bn under the initial plan.
Petrobras produced 2.181mn b/d of oil in Brazil in 2015, slightly exceeding its goal of 2.125mn b/d, or 4.5pc growth over 2.034mn b/d produced in 2014.
The company did not disclose domestic oil production goals beyond 2016, but its 2.8mn b/d target for 2020, down sharply from an original 4.2mn b/d, could also be scaled back in light of the investment cuts.
In October 2015, Petrobras eliminated around $11bn from planned investment spending for 2015-16. The company missed its $25bn investment target for 2015 by $2bn, but has bumped up planned spending for this year to $20bn from a previous $19bn, down from an initial $27bn.
Petrobras plans to fund the short-term investments through cost-cutting and extensive divestitures.
The company cut $1bn in operating expenses in 2015 and had planned to trim another $6bn in 2016. The reduction in operating expenses for this year is now under review, the company says.
Petrobras reached its $700mn divestment goal for 2015, and plans to unload $14bn in upstream, downstream and midstream assets this year. Among the assets on the block are its units in Argentina and Chile.
The firm plans to generate an additional $42.6bn in asset sales and corporate reorganizations in 2017-18.
Petrobras has reduced its oil price assumption to $45/bl from an earlier $55/bl for 2016, and has adjusted its currency exchange rate assumption to R4.06/$ from R3.80/$.
An ongoing political crisis stemming from a widespread investigation into systemic corruption at Petrobras has weighed on the Brazilian real for more than a year. The depreciation of the currency is particularly problematic for Petrobras, which has around $100bn in dollar-denominated debt.
Petrobras says it has around $25bn in financing options now available, and is considering more upstream platform sale and leaseback deals. Financing secured by future oil production is also among the funding deals now under consideration.
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