Petrobras boosts 2013 profit

Petrobras26 February 2014 – Petrobras reported an 11% boost to its 2013 annual results but saw fourth-quarter profits slide as a new company business plan called for modest cuts to investment and production targets over the next five years.

The Brazil state company posted net income of 23.57 billion reais ($10.9 billion) for the year as the company saw some results from fuel-price increases, asset sales and cost optimisations, it said Tuesday.

But fourth-quarter profits were 6.28 billion reais ($2.6 billion) in the three months to December, down from 7.7 billion reais in the year-ago quarter as the company faced challenges with its ambitious offshore pre-salt ramp-up.

Petrobras also released a 2014-2018 business plan that calls for modestly dialed-back spending of $220.6 billion, lower than the $236.7 billion laid out in the 2013-2017 plan.

Chief executive Maria das Gracas Foster will seek to convince investors that Petrobras can execute on its full plate of both exploration and production projects despite its repeated slippage on targets.

Petrobras said its goal is to bring production to 4 million barrels per day by 2010, less than its goal of 4.2 million bpd articulated in 2013.

The company aims to keep this production stabilised from 2020 through 2030.

With third-party and government contributions the company aspires for Brazil to hit and maintain output of 5.2 million bpd over that same timeframe.

But Petrobras still has work to do. Company output continued to decline in the fourth quarter of 2013 at 2.53 million barrels of oil equivalent per day, off from 2.61 million boepd produced in the year-ago period.

Annual production for 2013 was also down 2% to 2.53 million boepd mainly due to start-up delays and declines at mature fields, Petrobras said.

The Brazilian company made progress on its production drive in 2013, hooking up five new platforms with four more brought to their final installation sites. But with many projects already facing delays the new output was too late to shake up the overall production trend for 2013.

Petrobras said Brazil reserves stood at 16 billion barrels of oil equivalent as of 2013, up 1.6% from 2012.

The company also generated 3.99 billion reais over the quarter from divestments in Brazil, Peru and Uruguay, it said.
*Kathrine Schmidt – Upstreamonline

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