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Petrobras Cuts $24b from Investment Plan

Source: 9/20/2016, Location: South America

The investment portfolio of 2017-2021 Plan prioritizes exploration and production projects of oil in Brazil, with emphasis on deep water. In other business areas, investments are intended primarily to maintain operations and projects related to the flow of oil and natural gas. Total investments were reduced by 25% when compared to the last review of the Business and Management Plan 2015-2019, disclosed in January 2016.

Petrobras pledged up to $74.1 billion in capital spending for the 2017-2021 period compared with a $98.4 billion target in the prior four-year 2015-2019 plan.

Of the investments in the Exploration and Production area ($60.6 billion), 76% will be allocated to production development, 11% to exploration and 13% to operating support.

A total of US$12.4 billion will be invested in the Refining and Natural Gas area, 50% of which allocated to the assets’ operational continuity and the remainder to projects related to the outflow of oil and gas production.

In addition to greater efficiency of the funds invested, which will allow reducing the volume of investments without much impact on operational goals, the Plan also provides for the adoption of new measures to reduce costs (manageable operating expenses). Among these initiatives, we can highlight the implementation of new management tools, such as the Zero-Based Budgeting and differentiated management of contracts and personnel. The aim is to reduce by 18% the manageable operating expenses, when compared to the value estimated if no initiative had been implemented.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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