The increase in the 2024-2028 plan would include some US$4bil in inflation adjustments and between US$1bil and US$4bil for new projects. — Reuters
RIO DE JANEIRO: Brazil’s Petrobras may increase investments in its next five-year business plan by up to 10% over the previous one, which would place the state-run oil company’s capital expenditures at around US$86bil, chief financial officer Sergio Caetano Leite said in an interview on Monday.
The increase in the 2024-2028 plan, still being discussed, would include some US$4bil in inflation adjustments and between US$1bil and US$4bil for new projects, Leite said.
The plan, set to be published by year end, will be the first since President Luiz Inacio Lula da Silva took office in January pledging to increase investments by the oil giant while using it to drive a green transition.
Low carbon projects, Leite said, would account for a large part of the increase in investments expected for the new plan.
“We are going to adjust the plan for inflation and signal larger investments based on that correction,” the executive said. “But there is indeed more money going to investments.”
He said that if the low-carbon projects “are profitable and technically applicable, we might take those inflation-adjusted US$82bil up to US$86bil.”
Last month, Petrobras chief executive officer Jean Paul Prates told Reuters the company’s next five-year business plan would keep total investments roughly in line with the last.
The 2023-2027 plan, approved last December, includes expenditures of US$78bil.
Even with the projected increase, Leite said, Petrobras expects to maintain its gross debt between US$50bil and US$65bil. That metric reached US$58bil in the second quarter, up 8.7% from the prior quarter.
“There is room for leverage of up to US$65bil, but we would not like to use all of that. Petrobras generates a lot of cash, so we will continue to use part of the cash to invest. We are very careful with the company’s indebtedness, we do not want to indebt Petrobras beyond what is reasonable,” he said. — Reuters
