Brazil’s Petrobras is one of very few oil companies with no oil storage problem, according to its chief executive.
Roberto Castello Blanco said at an event yesterday that Petrobras’s oil stockpiles are “paradoxically” very low, Reuters reports. This level of inventories is a result of strong demand for the company’s products abroad, Castello Blanco added, noting that since he took the helm of the company, it has invested heavily in its overseas trading business division, and this investment has paid off in stronger exports.
Despite strong exports, however, last month Petrobras warned its shareholders that the coronavirus pandemic could leave a scar on the global economy, specifically on consumer behaviors, which would in turn affect the oil industry as it affects demand for the commodities it produces.
Petrobras reported a net loss of $9.7 billion for the first quarter of the year, from a profit of $1.98 billion for the last quarter of 2019. The loss resulted from an impairment charge of $13.4 billion, related to the company’s shallow water and deepwater assets.
"The assets that had their values adjusted are mostly oil fields in shallow and deep waters, whose investment decision was made in the past and based on more optimistic expectations for long-term prices," Petrobras said in May. "We are not surprised by its devaluation in a more challenging environment."
Now, Petrobras expects Brent to average $25 a barrel this year and only rise by about $5 annually until 2025, to reach $50. This is a lot more pessimistic than most analysts’ projections for this year and lower than Brent is trading at right now, too. Most price forecasts are around the $40 a barrel mark.
Meanwhile, Petrobras continues with its divestment program: the company earlier this week said it had completed the sale of seven offshore fields and had opened the non-binding phase for another offshore asset.
By Irina Slav for Oilprice.com
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