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Brazil’s Petrobras Registers 90 Percent Drop in Q2 Net Income

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Petrobras closed the second quarter of 2015 with a net income of R$531 million, an 89.3 percent decline from the R$4.95 billion registered during the same quarter last year. During the first quarter of 2015 the oil giant had registered a net profit of R$5.33 billion. For the first six months of the year, the net income totaled R$5.86 billion, down by 43 percent from the same period in 2014.

Petrobras' CEO, Aldemir Bendini, during announcement of financial results for Q2, 1st semester of 2015, Rio de Janeiro, Brazil News
Petrobras’ CEO, Aldemir Bendine, during announcement of financial results for Q2, 2015 photo by Tomaz Silva/Agencia Brasil.

According to Petrobras’ CEO, Aldemir Bendine, three factors led to the decline in net profits: depreciation of the Brazilian real in relation to the U.S. dollar (which increased the company’s net financial expenditures), the decline of petroleum prices in the international market and the payment of R$1.6 billion in back taxes for the years of 2007 through 2010.

“If we didn’t have these factors, it [net income] would have been close to R$6 billion, which we believe would have been a wonderful result,” said Bendine during the press conference on Thursday, August 6th to announce the results.

Petrobras’ Executive Director for Corporate Performance, Mario Jorge da Silva, said that the oil production target for this year has been maintained at approximately 2.8 million barrels per day.

According to Silva, for the first semester, Petrobras’ production (both foreign and domestic) registered a daily average of 2.8 million barrels per day, up by nine percent in relation to the same period last year. In the pre-salt layer, the oil giant registered a record monthly production in June of 747,000 barrels/day.

To improve the company’s financial situation, Petrobras announced this week it is seeking authorization from the country’s securities commission (CVM) to launch an IPO (initial public offering) on its fuel distributor subsidiary, BR Distribuidora.

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