New Petrobras CEO Promises Higher Shareholder Returns

The new chief executive of Petrobras, Magda Chambriard, has promised investors they will see stronger returns during her tenure, seeking to alleviate worries that the Brazilian state energy major would shrink those to boost investments.

“Petrobras is perfectly capable of guaranteeing returns for its shareholders, whether private or governmental,” Chambriard said this week as quoted by Bloomberg. “I understand we need to make a profit.”

The Brazilian government removed the previous chief executive of the company, Jean Paul Prates, earlier this month after he announced that Petrobras would be cutting dividends in order to boost investments as it seeks to shift away from oil and gas, and eyes generating more of its profits from low-carbon energy projects in the future.

Under Prates, Petrobras planned a substantial boost to its capital spending for the next five-year planning period, with the total seen at $102 billion. This is a 31% increase on the previous five-year investment period and aims to increase oil and gas production to some 3.2 million barrels of oil equivalent daily. That would be u from 2.8 million bpd at the moment.

At the same time, the former CEO had a plan to squeeze the share of oil and gas in the company’s business to 50% of revenues, with the other 50% coming from wind, solar, and biofuels in barely a decade.

At the same time, the Lula government wants Petrobras to boost its refining operations and any other business that could create more jobs, the Bloomberg report noted. Chambriard herself noted in her comments this week that the company needs to step up offshore exploration in new areas to secure future supply when the pre-salt basins peak.

“We have to be very careful with replenishing reserves unless we want to accept the fact that we could become importers again,” she said.

By Charles Kennedy for Oilprice.com

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