Petrobras raises investment forecast as outlook brightens

Petrobras raises investment forecast as outlook brightens

07 de abril, 2017 | Sem categoria

Petrobras raises investment forecast as outlook brightens

By Michael Place
Wednesday, March 22, 2017

Petrobras raises investment forecast as outlook brightens

Brazil’s state-run energy company Petrobras has raised its five-year investment forecast by around US$400mn as it prioritizes oil and gas production from deepwater fields.
The new projection came as the Rio de Janeiro-based firm announced a Q4 profit of 2.51bn reais (US$810mn), compared to a 36.9bn-real loss in the year-ago period, boosted by improved cash and debt positions.

In a full-year earnings presentation, Petrobras said it would outlay US$74.5bn in 2017-21, up from the previous forecast of US$74.1bn.
Some US$61.3bn will be pumped into exploration and production, an increase of US$600mn, while the budget for the refinery and natural gas division has been cut by about US$300mn. Capital expenditure in 2017 is expected to be US$19.8bn.

The company aims to raise US$21bn from divestments over the period, having already netted US$13.6bn from asset sales since January 2015.

CEO Pedro Parente said the divestment program gained a “new dynamic” following a decision by the federal audit court (TCU) to lift an injunction that blocked negotiations with prospective buyers.

“What we have noted is that there is great interest in these assets,” Parente told a press conference. “Assets that haven’t drawn interest – and there are very few – have been withdrawn from the [divestment] program.”

RECOVERY

Despite the positive Q4 figure, Petrobras posted a 2016 loss of 14.824bn reais, dragged down by a 20.89bn-real write-down on the value of its assets.
It was the third year in succession that Petrobras has reported an annual deficit as it continues to overcome the effects of a colossal corruption scandal.
However, Parente said the company was on the road to recovery, having reported 2016 free cash flow of 41.5bn reais, almost three times higher than the 2015 figure. Meanwhile divestments and cost cuts allowed the company to slash net debt by 20% to US$ 96.4bn, Parente added.
“It’s the seventh consecutive quarter in which we’ve had positive free cash flow,” he said. “That leaves us quite well placed when compared to others in the global oil and gas industry.”
Petrobras said it achieved its crude production target for the second straight year with output of 2.144Mb/d in Brazil.