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Petrobras plans to raise $26.9 billion with asset sales, partnering

Reuters  |  SAO PAULO/RIO DE JANEIRO 

SAO PAULO/(Reuters) - Brazilian state-run company plans to raise some $26.9 billion via asset sales and partnerships by 2023 while boosting investments on the front edge of an anticipated production boom in

intends to make $84.1 billion in investments from 2019 to 2023, above the $74.5 billion forecast in its 2018 to 2022 plan, it said in a five-year investment program unveiled on Wednesday morning.

is trying to stay the course on efforts to reduce one of the heftiest debt loads among companies worldwide - $88 billion in gross debt - through divestments and an investment focus on Brazil's coveted offshore pre-salt area.

"The strategic plan came within the expectations of the market, a reasonable increase in prices, with important refining divestments and an ambitious leverage target," said Adriano Pires, a at for Infrastructure.

While the plan appeared to contain no major surprises, it was released just as prosecutors in alleged that trading giants Vitol, Trafigura, and paid over $30 million in bribes to employees.

The allegations are another black eye for Petrobras, which has been at the center of Brazil's sprawling "Car Wash" corruption investigations, and the firm is eager to clean up its image.

Preferred Brazil-listed shares in Petrobras fell 1 percent in morning trade, while Brazil's benchmark Bovespa index were little changed.

Whether or not the company sticks to the plan, Pires added, will depend on the incoming government of right-wing President-elect

"The challenge of the next government is to maintain this plan," he said.

Bolsonaro, a former lawmaker and military officer, last month named Roberto Castello Branco, a University of Chicago-trained economist, to succeed Ivan Monteiro, who is set to step down on Jan. 1.

While Castello Branco has said he favors selling noncore assets, some of the generals close to Bolsonaro, who see the oil company as a "strategic asset," may put the brakes on any radical restructuring bid.

Petrobras will maintain its focus on deepwater exploration and production, particularly in Brazil's coveted pre-salt blocks, an offshore area where billions of barrels are locked beneath a thick layer of salt under the ocean. Some 56 percent of its production-related investments would go to pre-salt,

The oil company also disclosed its return on invested capital should be above 11 percent in 2020, as it sells assets and cuts debt.

(Reporting by Gram Slattery, Roberto Samora, Rodrigo Viga Gaier, Carolina Mandl; Editing by and Jeffrey Benkoe)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, December 05 2018. 20:50 IST
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