POST Online Media Lite Edition


Brazil's Petrobras cuts 5-year investment plan by 37%

Staff writer |
Brazilian state-run oil company Petróleo Brasileiro SA said (Petrobras) it plans to slash investments by 37% over the next five years.

Article continues below

Petrobras expects capital spending over the 2015-2019 period to total $130.3 billion, the company said in a long-delayed document outlining its five-year business plan. Petrobras's previous five-year plan, through 2018, listed $206.8 billion in projects under way.

The amount of divestments in 2015/2016 was revised to $15.1 billion (of which 30% from Exploration & Production, 30% from Downstream and 40% from Gas & Power). The Plan also anticipates additional efforts in the restructuring of businesses, demobilizing of assets and additional divestments, totaling $42.6 billion during 2017/2018.

The cutback has huge implications Brazil's economy, which is already forecast to contract by more than 1% this year. Petrobras is the nation's single biggest source of investment, supporting a massive network of suppliers and construction activity.

Its sales in 2014 were equivalent to around 6% of Brazil's GDP, while its capital expenditures accounted for nearly 8% of total investment.

The revised plan also deals a significant setback to Brazil's ambitions of joining the world's top five oil-producing nations by the end of this decade.

Petrobras reduced its 2020 domestic production target to 2.8 million barrels of oil equivalent a day, down from a previous goal of 4.2 million barrels.

What to read next

Petrobras to sell assets in Paraguay
Petrobras to sell 20 percent interests in two gas fields
Petrobras lost 2.29 million barrels of oil thanks to strike