MercoPress, en Español

Montevideo, May 26th 2019 - 01:48 UTC

Petrobras plans further 2016/20 investments cuts, says Sao Paulo media

Friday, January 8th 2016 - 18:15 UTC
Full article 10 comments
The revised investment plans will focus on deep-water production, with less dedicated to exploration The revised investment plans will focus on deep-water production, with less dedicated to exploration

Brazil state-run hydrocarbons giant Petrobras will reportedly present a five-year investment plan next month with a target lower than the US$19 billion plan announced last year. Despite two budget cuts last year, Petrobras' plans for the 2016 to 2020 period will include a further drop, with the cuts expected to come from onshore and shallow-water areas, according to a report in the Brazilian daily Estado de S Paulo.

 The revised investment plans will focus on deep-water production, with less dedicated to exploration and almost nothing set aside for onshore or shallow-water blocks, the newspaper reported, citing anonymous sources.

The debt-laden company is thought to have sufficient cash to meet its commitments through July 2017.

In related news rig contractor London based Ensco Plc said Petrobras has declared void a contract for a drillship leased to the Brazilian oil producer. Petrobras, chartered the DS-5 in 2008, when it was owned by Pride International, a company bought by Ensco in 2011.

Petrobras said in a notice on Monday that Pride had knowledge that the rig's shipbuilder made “improper payments” to a marketing consultant who then shared the money with former employees of Petrobras. Ensco has denied allegations of corruption in Brazil.

Dozens of Brazilian engineering firms accused of price fixing and overcharging Petrobras for work, in order to pass on excess funds as bribes to executives and politicians, have been blacklisted from signing new contracts but have not had existing contracts voided by Petrobras.

Brazilian federal prosecutors said in August that criminal charges related to the DS-5 charter were coming “in due course” but have not yet presented them.

Ensco reiterated on Wednesday it had found no evidence that Pride, the company, or any current or former employees were aware of or involved in any wrongdoing. The rig contractor said it planned to assert its legal rights under the contract.

Ensco's other rigs leased to Petrobras will continue to work under their contracts, the filing said.

Tags: Brazil, Petrobras.

Top Comments

Disclaimer & comment rules
  • yankeeboy

    The debt-laden company is thought to have sufficient cash to meet its commitments through July 2017.

    I wonder what price they used for oil to cash flow this.
    I bet it was 40 and not 20.
    :)

    Jan 08th, 2016 - 06:35 pm 0
  • Brasileiro

    Any price above US$ 8 is already profitable.

    Jan 08th, 2016 - 08:41 pm 0
  • yankeeboy

    Profitability isn't the problem.
    Cash flow is
    They have 10X more debt than they're worth.
    And they can't sustain that for much longer

    Jan 08th, 2016 - 09:12 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!