Petrobras Scales Back Five-Year Plan as Oil Prices Weigh on Spending

Core Viewpoint - Petrobras is set to slightly reduce its five-year investment plan for the first time under President Lula, influenced by declining crude prices, with a focus on maintaining financial stability without increasing debt or altering its dividend policy [1][2][5]. Investment Plan Adjustment - The new strategic plan for 2025–2029 will cut planned capital expenditures by approximately 2%, from $111 billion to around $109 billion, marking the first decline since the previous administration's roadmap [2][5]. - The adjustment is in response to Brent crude trading near $62 per barrel, down from an average of $70.85 earlier this year, prompting Petrobras to focus on maximizing production and refining capacity with existing resources [3][5]. Production and Cost Management - Petrobras aims to replicate the success of its Almirante Tamandaré floating production unit, which recently achieved a record output of 270,000 barrels per day, exceeding its design capacity of 225,000 bpd [4]. - The company plans to renegotiate with suppliers and reassess select projects to control costs while still expanding production [4][5]. Strategic Balancing - President Lula encourages aggressive investment in Brazil's economic growth, but Petrobras faces a challenge in balancing energy expansion with adapting to lower global oil prices [5]. - For 2026, approximately $19.6 billion of the company's investments are already committed, limiting flexibility for further cuts in the investment plan [5].