Petrobras in growth mode having cut risk profile

Brazil’s Petrobras has taken huge steps to alter its risk profile over the past few years, bringing the company in line with oil and gas supermajors.

The company is now planning increased investment in exploration, reserves replacement and production growth.

Evaluate Energy data shows that Petrobras has radically altered its capital structure to a company now comparable (based on key risk ratios) to the world’s other largest oil and gas producers.

Debt to capital employed ratios were once significantly higher than BP, Chevron, ConocoPhillips, ExxonMobil, Shell and TotalEnergies.

Petrobras is now the third least debt-funded company within that group relative to overall capital employed.

Debt reduction

This has been achieved by a drastic reduction in debt.

Petrobras’ total debt excluding leases is $80 billion lower than 2017 and approximately $15 billion lower than the supermajor average.

Operating cash flow increases have supported the bulk of this capital restructuring. Petrobras has also been extremely active selling assets and generating extra cash.

Next steps

Petrobras maintained production and proved reserves life at consistent levels since 2017 (around 2.8 million boe/d and around 11-12 years, respectively). However, among the supermajors only ConocoPhillips invested less in terms of capital spending in pure dollar terms. Petrobras channelled the lowest proportion of cash to capex.

This is set to be addressed by Petrobras’ latest strategic plans.

Increased spending is earmarked for its core Pre-Salt developments in deep waters offshore. Petrobras is also revisiting ideas of international expansion, allocating significant capital to exploration, and investments in areas it previously sought to exit – including petrochemicals and renewable power and technologies.

Source: Petrobras Strategic Plan 2024 – 2028, available via Evaluate Energy Documents

This analysis was created using:

• Evaluate Energy: Our data enables in-depth analysis of financial and operating performance of hundreds of upstream and downstream oil and gas companies around the world using a range of proprietary tools and dashboards. Learn more here.
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