Petrobras cuts CAPEX - focusses on production developmentNews // July 6, 2015
Broker Seabrokers says Petrobras has released its 2015-2019 Business and Management Plan, revealing a 37 per cent reduction in investment from its previous guidance.
The latest plan projects total CAPEX of US$130.3 billion over the five-year period, of which US$108.6 billion will be spent on exploration and production. This will consist of 86 per cent for production development, 11 per cent for exploration, and 3 per cent for operational support.
Said Seabrokers: "Petrobras’ plan prioritises domestic E&P activities, particularly at its pre-salt acreage. However, exploration activities within Brazil will merely be concentrated on meeting the minimum exploratory requirements for individual blocks. The impact of this reduction in spending is a significant decrease to Petrobras’ projected oil and gas production."
In its previous Business Plan, Petrobras had projected production (both domestic and international) of 5.3 million barrels of oil equivalent per day (boed) by 2020; this target has now been reduced to 3.7 million boed.