Brazil’s Petrobras Divestment Program to Increase in 2016

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – In four years time Petrobras will have a smaller structure but be much more profitable than today, assured the oil giant’s CEO, Aldemir Bendine on Tuesday, adding that the divestment program adopted by the company this year will be increased next year.

“I can guarantee that the divestment next year will be stronger and greater than one can imagine,” he said during an end-of-the-year breakfast with reporters. “We have no doubts that we will reach the planned value due to the negotiations underway.”

For Bendine the company will come out of this crisis strengthened and although it will be smaller than it is, it will become ‘more profitable than today with greater operational capacity’.

The CEO said that the company was able to surprise the market with the gains obtained from the selling of part of Gaspetro’s stocks to the private sector. “We obtained much more than expected and without transferring the control of the subsidiary,” he stated.

Petrobras will have a ‘robust’ cash flow to meet commitments and the expected challenges in the year to come, said the CEO. The challenge now, said Bendine was to pay off the debts with the divestment program. “The improvement in efficiency alone will not be sufficient to bring the debt to a more comfortable level,” he concluded.

In October Petrobras, announced it was reducing its forecast for investments in 2015-2016 by US$11 billion and operational expenditures by US$7 billion due to the decline of international oil prices and the recent appreciation of the U.S. dollar.

The reduction in investments from US$37.1 billion in 2014 to US$25 billion this year is expected to be responsible for at least a two percent contraction in the country’s Gross Domestic Product (GDP) for 2015 according to government studies.