Petrobras plan to invest $100bn raises concerns
Petrobras is expected to release the company’s strategic plan for the 2024-2028 period on Thursday (23) after the market closes, sources familiar with the discussions told Valor. Banks estimate that the company’s total investments over the next five years could range from $86 billion to $105 billion. If the ceiling of the projections is confirmed, this will mean an annual average of $21 billion, which makes Petrobras one of the Brazilian companies that invest the most.The analysts interviewed believe that there will be an increase of at least $8 billion compared to the current plan, valid for the years 2023 to 2027. The justification for this increase lies in the need to correct project disbursements for inflation, they say.Petrobras’s current plan provides for $78 billion in total investments, 83% of which will be focused on exploration and production. At the beginning of November, the state-owned company reduced its capex forecast for 2023 to $13 billion from $16 billion, citing a "challenging scenario in the supplier market."Valor gathered projections made by Itaú BBA, Ativa Investimentos, Goldman Sachs, and UBS BB.Ilan Arbetman, an analyst at Ativa Investimentos, said that the broker expects at least $86 billion in investments by Petrobras. The problem, he said, is if the figure exceeds $100 billion, as it could lead to further revisions if the figure proves to be unrealistic. "Petrobras has already changed the capex figure for 2023 due to the difficulty of execution. If you open up a very long horizon, especially in areas you haven’t mastered yet, the chance of frustration is even greater."According to Mr. Arbetman, the stress on the market could be even greater if the state-owned company reduces investments in exploration and production to less than 80% of total investments. This scenario arises as a result of Petrobras’s decision to increase its investment in renewable energies. This year, the company approved allocating between 6% and 15% of capex to assets related to the energy transition. The market is concerned about whether Petrobras will have enough profitable projects in its portfolio to justify allocating all this money.The investment in a broad portfolio of projects, many of which did not pay themselves, was a determining factor in Petrobras reaching one of the highest corporate debts in the world during the previous Workers’ Party (PT) administrations. During this period, there was also prolonged retention of fuel prices...
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