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Brazilian national oil company Petroleo Brasileiro SA (NYSE:PBR), aka Petrobras, has halted the sale of key assets in a broad divestment process that was kicked off by Petrobras' previous management under former President Jair Bolsonaro. The state-run firm has announced it will no longer sell the onshore Urucu and Bahia-Terra clusters, as well as the Manati oilfield and Petrobras Operaciones, its subsidiary in Argentina. The company says it has adopted a new policy for oil exploration and production based on "maximizing portfolio value by focusing on profitable assets".
Back in May, Petrobras launched a new commercial portfolio for natural gas in a move that will see the company expand and diversify deadlines, benchmarks and places of delivery in a bid to become more competitive. The company also announced it will resume using Henry Hub benchmark prices for gas in addition to Brent oil prices, while offering distributors more options for contract deadlines and delivery locations.
Using the new portfolio, Petrobras, which currently has contracts with more than 14 suppliers, will become more competitive in the public calls being made by the state distributors and in the commercialization via the Free Market.
Earlier, Petrobras reported that its Q1 2023 revenue and profits decreased which it attributed to lower commodity prices. Q1 net income fell to 38.16B reais (~$7.7B) from 44.6B reais in the prior-year period, but well above the 31.96B reais analyst consensus estimate. Q1 adjusted EBITDA fell to 72.5B reais from 77.7B reais a year ago but also topped the consensus estimate of 67.36B reais. Meanwhile, revenues fell 1.8% Y/Y to 139.07B.
Thankfully, PBR continues paying out hefty dividends to shareholders, with payouts for the quarter clocking in at 24.7B reais ($4.94B).
Petrobras has been at the center of a major corruption scandal over the past decade, due in large part to political appointments in its senior management. Last year, the oil and gas supermajor announced that it will increase 2023-2027 investments by about 15% to $78 billion over the company’s 2022-2026 projected spending. But the company’s new production expansion policy is likely to see those cuts shelved.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.