Petrobras Slashes Five-year Investment Plan

(RTTNews) - Brazil's state-run oil company Petroleo Brasileiro SA (PBR) said it would slash capital expenditures to $74.1 billion in the 2017-21 period, a 25% reduction from the 2015-19 period.

The set of investments generated from Petrobras' projects, however, is estimated at $40 billion over the next ten years, showing that despite the lower volume of investments, the company levers significant amounts through its operations, the company said.

Furthermore, performance targets will be broken down to the supervisor level, and monthly review meetings will be held. The estimate in the Strategic Plan is an 18 percent reduction compared to the first estimate for these expenses in the 2017-2021 period. These expenses total $126 billion. The cut adds up to about R$27 billion compared to the initial estimate for 2017-2021. If the comparison is made with the 2015-2019 plan, which was in force, expense reduction adds up to approximately R$16 billion, or 11 percent.

Petrobras also plans to sell $19.5 billion in assets during 2017-18, up from a target of $15.1 billion in 2015-16.

In a annual presentation of its five-year business plan, Petrobras said its domestic output of oil and liquefied natural gas, or LNG, will rise to 2.77 million barrels a day in 2021, up from an average of 2.09 million in the first eight months of this year.