FAVERSHAM, UK – Analyst Douglas-Westwood (DW) says Petrobras’ “2015-2019 Business and Management Plan” reflects the new reality facing the company.
Due to lower oil prices and unfavorable exchange rates, Petrobras has had to trim its planned expenditure by 40% from plans announced a year ago, and is now allocating 84% of its budget to E&P compared to 70% in the previous plan.
Production decline from the company’s existing fields is a major challenge, DW says, with around 200,000 b/d of capacity lost each year.
Petrobras’ revised production target forecasts domestic oil output increasing to only 2.8 MMb/d by 2020, 40% lower than its projected figure 12 months ago.
DW believes Brazil will need to drill around 300 development wells in deepwater during this period to attain its production target. However, many of the 29 new rigs the company has commissioned could be impacted by funding problems or yards withdrawing from their contracts.