Petroleo Brasileiro (Petrobras) is once again decreasing its capex by 25%, the company revealed as part of its 2017-2021 business and management plan today (20 September).
Libra operations. Image from Petrobras.
The Brazilian giant’s capex will now stand at US$74.1 billion, a 25% fall from its previous 2015-2019 plan of $98.4 billion. This also marks the second 25% decrease in the beleaguered company’s plans announced this year. In January, Petrobras reduced its capex by $32 billion from $130.3 billion to $98.4 billion.
"In the next couple years, we will concentrate on recovering Petrobras' financial strength as an integrated energy company that is focused on oil and gas. In the total five-year horizon this plan encompasses, we propose that the company will have been restructured, that it have unquestionable governance and ethical standards in order to support increased, but realistic production, and that it be able to invest and position itself in the transition process the global energy market is going through," Petrobras CEO Pedro Parente said.
Between 2017 and 2018, Petrobras has set its sights on divesting some $19.5 billion of its assets, a 29% jump when compared to its goal of $15.1 billion in 2015-2016.
The divestures are expected to be achieved by increasing strategic partnerships in exploration and production (E&P), refining, transportation, logistics, distribution, and in sales; in addition to exiting several sectors, Petrobras said.
Of its total investments and capex budget, Petrobras is allotting 82% to exploration and production. The remaining 17% and 1% will go to refining and natural gas, and other segments areas, respectively.
The set of investments generated from Petrobras' projects, however, is estimated at $40 billion over the next 10 years, showing that despite the lower volume of investments, the company levers significant amounts through its operations, the company said.
Petrobras is prioritizing the development of deepwater production with a focus on strategic partnerships, combining technical competencies and technologies, according to its presentation.
When looking at its upstream capex breakdown, its total E&P budget stands at $60.6 billion, with 76% going to development of production; 13% to operational support; and 11% to exploration. For production development and exploration, 66% will be allocated to pre-salt, and the remaining 34% will go to post-salt.
According to Petrobras, its production target for oil and natural gas in Brazil was set at 2.8 MMb/d in 2021, considering the entry into operation of 19 production systems in the period ranging from 2010 to 2021.
By next year, Petrobras anticipates the start-up at Tartaruga Verde and Mestica in the post-salt Campos basin; Lula North and Lula South in the pre-salt Santos basin; in addition to extended well tests at its giant Libra pre-salt project.
In 2018, Petrobras is looking to start-up at the Berbigao and Lula Extreme South; in addition to the Buzios 1, 2 and 3 fields, all in the pre-salt.
In 2019, Petrobras is planning to start-up production at Buzios 4 and Atapu 1.
In 2020, production is anticipated to start-up at the Sepia pilot, Buzios 5, and commercial production from Libra all in the pre-salt; in addition to the Marlim revitalization project, module 1 in the Campos post-salt area.
In 2021, Petrobras expects to start production from Itapu, Libra 2, and the integration of Parque das Baleais. The company also expects first oil from the Marlim revitalization project, module 2.