Brazilian state oil company Petrobras slashed its projected investments and operating expenses for this year and 2016 on Tuesday while keeping its projection for disinvestment and its production target unchanged.
Petrobras had to make an adjustment to its 2015 and 2016 financial planning “given new Brent crude oil prices and the exchange rate” changes that have depreciated the Brazilian real currency against the U.S. dollar, a company spokeswoman told Latin Business Daily.
Brent crude oil prices, a benchmark used to price Brazilian crude oil exports, have declined 44 percent over the past year.
The Petrobras representative said that the company’s projection for investment for 2015 was lowered to $25 billion, down from a previous estimate of $28 billion, while for 2016 the figure was slashed to $19 billion, down from $27 billion.
As far as manageable operating expenses, the new projection for this year is $29 billion, down from the previous $30 million projection. For 2016, the figure is $21 billion, down from $27 billion, the representative added.
Manageable operating expenses are the company´s total expenses excluding raw material purchases.
“When the company first disclosed its 2015-2019 business and management plan, it said that carrying out the plan was subject to risk factors that may adversely impact projections, including changes in market variables such as oil prices and the exchange rate,” the Petrobras spokeswoman said.
With the changes, Petrobras aims to “maintain its fundamental goals of deleveraging the company and creating value for shareholders,” she said. “The 2015-2016 projections for disinvestments remains at $15.1 billion, with around $700 million in 2015 and $14.4 billion in 2016.”
Petrobras is the second Latin American state oil company this week to announce changes following sharp crude price declines that have hurt revenue.
Earlier this week, Ecuadorean state oil company Petroecuador said it was increasing gasoline prices, cutting jobs, and planning the sale or transfer of its fuel stations network to help compensate for declining revenue as a result of lower income from the export of crude oil.
