After this article was published, Petrobras announced a business plan that projects capital investments of US$102 billion from 2024 to 2028.
BNamericas is expected to release a new report on Friday with details and analysis of the state-owned company's new plans.
Brazil's Petrobras could announce a new business plan on Friday, according to CEO Jean-Paul Prates.
Analysts believe the plan, which covers the period 2024-28, will result in higher capital expenditures than the previous five-year (2023-27) plan, which had envisaged investments of USD 78 billion. There is.
The expectations largely reflect the new company's direction to reduce dividends to shareholders and increase investment in “non-core” areas such as refining and renewable energy projects.
All of this will be combined with continued large-scale exploration and production (E&P) investment.
“Faced with the need for Brazil to participate in the energy transition agenda in a sovereign manner, Petrobras is expected to increase the amount of investment in its next plans,” said Mahatma, director of local strategic oil research think tank Ineep.・Santos told BNamericas. .
The Brazilian oil workers' union FUP, a key political ally of Brazilian President Luiz Inácio Lula da Silva, believes the new plan should outline capital investments of around US$100 billion.
“The country's largest companies play a central role in promoting development, jobs and incomes for the Brazilian people, pursue self-sufficiency in petroleum derivatives at fair prices, and become the driving force behind Brazil's energy transition,” FUP said in a statement. It has to become,” he said.
According to the union, 90% of the total amount will be covered by own funds (generating operating cash) and 10% (US$10 billion) will be covered by increased debt.
“I think it is possible for Petrobras to achieve this $100 billion in capital expenditures if they can better measure the ratio of investments to distributions. But of course it depends on external factors such as the state of global oil prices. It depends,” he added. Santos.
Moody's senior analyst Carolina Chimenti doesn't expect any major changes from current plans, where most investments are expected to be in E&P and spending on ESG-focused projects is expected to increase.
“Given that this is a big question mark right now, there will probably be more clarity on M&A. On the downstream side, the focus should be on continuing to increase refinery capacity,” she told BNamericas.
For Chimenti, from an energy transition perspective, investments should focus on biofuels and the decarbonization of operations, among other things.
Fabricio Gonçalves, chief executive officer of investment consultancy Box Asset Management, said investors should not take advantage of the federal government's suggestion that Petrobras should follow “a path that is unhealthy for minority shareholders.” He said he might pay more attention to the news emanating from Brasilia, the capital of the country. Work on new plans to guide your company's future.
“This process is likely to result in greater freedom of executive action for Mr. Prates and the directors who, together with him, are responsible for setting fuel prices,” he told BNamericas.
The analyst said the concept of replacement costs stipulated in the state-owned company's new fuel pricing policy suggests that Petrobras will continue to compete with imports in the domestic market.
On the other hand, in regions where there are no private refiners competing with Petrobras, the strategy is likely to be one where importers analyze how much they will pay to import the product.
“Emerging scenarios challenge Petrobras and other oil producers to determine how best to manage their assets, especially their refineries, in order to simultaneously optimize production and comply with tax and operating cost limits. We will evaluate it,” Gonsalves added.
