Petrobras Boosts Oil and Gas Focus in New Strategic Plan
September 16, 2024
Petrobras' new multi-year strategic plan will have greater focus on upstream operations than the previous one, Chief Financial Officer Fernando Melgarejo said on Monday, as the Brazilian state-runfirm looks to rebuild oil and gas reserves.
Melgarejo told Reuters that the 2025-2029 plan, which is currently being drafted, does not foresee any major merger or acquisition and is unlikely to require greater debt and cash when compared to the 2024-2028 one.
"We'll have a more upstream-focused vision," Melgarejo said in an interview, without making immediately clear what was being deemphasized. "Every drop of oil is important to the company - if economically viable, obviously."
He said the current plan predicts a reduction in Petrobras' oil and gas reserves as early as 2030, a scenario he described as "uncomfortable."
Melgarejo was named CFO in June as part of a broader shake-up that saw Brazilian President Luiz Inacio Lula da Silva replacing former chief executive Jean Paul Prates with Magda Chambriard as he pushed the oil giant to speed up investments.
Melgarejo spoke after Petrobras completed the issuance of $1 billion in dollar-denominated global notes, a transaction he said reflected the confidence markets have in Petrobras under Chambriard.
Petrobras has been looking to explore the environmentally sensitive Equatorial Margin, Brazil's most promising oil frontier, and has projects in other countries such as exploring natural gas in Colombia.
"This (reserve) reduction from 2030 is uncomfortable for the current management. The focus is to try to replenish reserves as much as possible," Melgarejo said. "Without losing sight of the energy transition, but one cannot overshadow the other."
Released last year under Prates, Petrobras' 2024-2028 strategic plan foresees $102 billion in investments including potential acquisitions and low-carbon initiatives such as biorefining, and wind and solar power.
Melgarejo said no major acquisitions would be included in the new investment plan, and emphasized that it would also not require Petrobras to contract much debt.
"We will move there in a certain normality, without major or abrupt changes," he said.
(Reuters - Reporting by Marta Nogueira; Writing by Gabriel Araujo; Editing by Brendan O'Boyle and Leslie Adler)
