Energy

Brazil's Petrobras says its value could increase by almost half by 2021

Credit: REUTERS/SERGIO MORAES

Brazilian state-run oil firm Petrobras expects to boost its equity value by roughly 45% by 2021, in large part through cost cuts and the divestment of non-core assets, it said in a presentation released on Wednesday.

By Rodrigo Campos and Gram Slattery

NEW YORK/RIO DE JANEIRO, Dec 4 (Reuters) - Brazilian state-run oil firm Petrobras PETR4.SA expects to boost its equity value by roughly 45% by 2021, in large part through cost cuts and the divestment of non-core assets, it said in a presentation released on Wednesday.

Capital expenditure from 2020 to 2024 will be concentrated in Brazil's offshore "pre-salt" formation, with a special emphasis on its Buzios field, said Petroleo Brasileiro SA PETR4.SA, as the firm is formally known.

The presentation, which was accompanied by comments from Petrobras executives at the firm's New York Investors' Day, was the first time the firm has offered details on its five-year business plan, released last week.

It said it could add assets in Bolivia and legacy deepwater oilfields to its $20 billion-$30 billion divestment portfolio.

Some 59% of the $75 billion in forecast capital expenditure over the next five years will be geared toward the pre-salt formation, a prolific oil producing zone off Brazil's southeastern coast, the firm said. It said 29% of total capex would go to the Buzios oilfield, considered one of the world's most promising.

Petrobras also said it sees some $1 billion in "potential gains" in 2020 versus 2018 via increased sales of bunker fuel, which is generally used to power ships. International regulators are lowering the maximum allowed sulfur content in bunker fuel, which is seen as favorable for Brazil, as the nation's crude is naturally low in sulfur.

Brazil-listed preferred shares in Petrobras were up 1.7% in afternoon trade.

(Reporting by Rodrigo Campos and Gram Slattery Editing by Chizu Nomiyama and Bernadette Baum)

((gram.slattery@thomsonreuters.com; +55-21-2223-7117))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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