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Brazil’s Petrobras Announces Further Investment Cuts

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – State-owned petroleum giant Petrobras announced a reduction of its investment forecast over the next five years. According to the release issued on Tuesday (September 20th) morning, investment forecasts for the 2017-2021 period will total US$74.1 billion, twenty-five percent less than the previous plan (from 2015 to 2019), which called for investments of US$98.4 billion.

Brazil, Rio de Janeiro,Petrobras' new CEO Pedro Parente speaks to reporters after his swearing in ceremony
Petrobras’ new CEO Pedro Parente speaks to reporters after his swearing in ceremony, photo by Steferson Faria/Agencia Petrobras.

“The plan’s investment portfolio prioritizes exploration and oil production projects in Brazil, with emphasis on deep water exploration. In the other areas of business, investments will be primarily to maintain operations and projects related to the production of oil and natural gas,” said the statement issued by the company.

According to the release, Petrobras’ Board approved the new business plan on Monday (September 19th). Over the last few semesters, investment forecasts have steadily been decreasing with each new revision of the company’s business plan.

Included in this latest plan are divestments and partnerships, like the one announced earlier this month, with Norwegian state-owned company Statoil, which would bring to the company close to US$19.5 billion between 2017 and 2018. In the years 2015 and 2016, Petrobras hopes to save US$15.1 billion with the selling of peripheral assets and partnerships agreements.

During Aldemir Bendine’s administration the plan for the period 2014-2018 was estimated at about US$220 billion; falling to about $ 130 billion in the period 2015-2019. Pedro Parente replaced Bendine earlier this year, when Michel Temer took over the federal government after the suspension and consequent impeachment of former President Dilma Rousseff. This is the first business plan drafted under Parente’s administration.

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