-Petrobras Executives Flag Production Boost
Oil and gas production at Petroleo Brasileiro SA is on the rise, executives said, telling analysts that the firm was on course to hit its annual production target despite lagging output in the first three months of the year.
In a call with analysts following the release of first-quarter results, Exploration and Production Director Carlos Alberto de Oliveira reaffirmed the firm’s production goal of 2.8 million barrels of oil equivalent per day (boepd) for 2019, adding that the company has been exceeding that figure in May. In the first quarter, the firm reported oil production of 2.538 million boepd, as output was hit by a number of stoppages.
Executives at Petrobras, as the firm is known, also pledged to keep forging ahead with an ambitious divestment program.
Chief Executive Officer Roberto Castello Branco said the company would look to sell its remaining 10-percent stakes in TAG and NTS, two natural gas pipeline units recently sold to investors, as soon as possible.
The firm will also publish a teaser in June with first details for investors on the sale of eight refineries in a process it has said could fetch some $15 billion, said Anelise Lara, the head of downstream operations.
Castello Branco said fuel distribution unit Petrobras Distribuidora SA, which is being privatized, would not be a potential purchaser of the refineries, contradicting comments by that unit’s CEO.
Petrobras recently posted a 42-percent drop in first quarter net profit, missing Refinitiv estimates.
Analysts at BTG Pactual led by Thiago Duarte called the results “uninspiring,” noting in particular a 38-percent increase in net debt due to the adoption of new accounting standards.
But investors seemed unfazed, and were pleased by increasing production. Brazil-listed preferred shares in Petrobras were up 4.1 percent in mid-day trade. Brazil’s benchmark Bovespa index was up 1.9 percent.
------ CNOOC May Bid On More Brazil Oil Blocks
Chinese oil company CNOOC Ltd wants to expand in Brazil and is considering bidding in an auction of offshore exploration blocks in the pre-salt area set for later this year, the head of the firm’s Brazilian unit said.
CNOOC, owned by Chinese state-owned firm China National Offshore Oil Corp, is also looking for a partner in Bloc 592 in the Espirito Santo basin which it was awarded in a previous auction, country head Sheng Jianbo said at an event in Rio de Janeiro. The company additionally owns a stake in the Libra field in the Santos basin.
Brazil is set to hold a round of pre-salt auctions on Nov. 7. It will also auction off rights to excess oil in the so-called transfer-of-rights area on Oct. 28 following the settlement of a long-running dispute with state-controlled firm Petroleo Brasileiro SA, known as Petrobras.
“We are looking at (pre-salt auctions) and it seems like a good opportunity,” Sheng said. “We want to expand production in Brazil...this will depend on the size of the discoveries.”
It was not clear whether Sheng was referring to the Nov. 7 or Oct. 28 auctions, or both.
CNOOC already owns a 10 percent stake in the Brazil’s Libra field in the Santos basin, jointly invested with Petrobras, Anglo-Dutch Royal Dutch Shell Plc and France’s Total SA .
Sheng said production in the Libra field’s long-term test is 58,000 barrels of oil equivalent per day.