The long-awaited 5-year strategic plan spanning 2009-13 for Brazil’s Petroleo Brasilerio SA (Petrobras)—already delayed several times—will be assessed by the company’s board at the end of January, according to Paulo Roberto Costa, downstream director.
“We usually present our strategic plan to the board in September, but due to market volatility, the board requested a more detailed plan, which will be presented at the end of January,” said Costa, referring to a meeting of the company’s board scheduled for Jan. 23.
Meanwhile, Petrobras financial and investor relations director Almir Barbassa, refuting analysts’ forecasts that Petrobras would issue debt in the next few days, said the firm will launch a bond issue only after it defines and announces the company’s strategic plan for 2009-13.
Petrobras initially said it would announce the investment plan at the start of September. It then delayed the date to the beginning of October and then to the second half of October.
The firm then said its announcement would be made before yearend 2008, but even that date slid as company executives pondered the growing impact of the worldwide financial crisis on company projections.
In December, company president Sergio Gabrielli finally said that the announcement of the 5-year strategic plan would have to be pushed back yet again as the 2009 corporate budget was still being worked out.
At the time, Gabrielli said that investment in 2009 should total around 55 billion reais ($23 billion), a figure larger than that spent in 2008, but well below the 72 billion reais ($30 billion) Petrobras first presented to lawmakers in August.
“In the last 6 months, we saw a gigantic variation in oil prices,” Gabrielli said in December. “We discussed the problems with making projections for [oil] prices and costs, so it was decided to wait [on the strategic plan] until there was greater clarity,” he said.
At the time, Gabrielli said the enormous drop in international oil prices—from $150/bbl in August to just over $40/bbl in December—surprised company executives. “We knew that the price of oil was going to fall, but we didn’t imagine it would be by so much,” he said.
Despite the decline in international oil prices, Gabrielli said development of the company’s promising subsalt oil reserves was still viable at current levels. “Given the actual international oil prices, the subsalt is viable,” Gabrielli said, explaining that the board’s decision was based on oil prices between $40-50/bbl.