The Brazilian operator has struggled to sell non-core assets, including pipelines, and its attempts to divest upstream operations have been held up by bureaucracy.
Petrobras has mandatory operatorship (30%) in Brazil’s presalt basins: as DW points out, this not only limits the company’s options for raising cash from existing upstream assets but also increases its capital outlay.
Brazil’s unitization rules have slowed foreign investment in upstream operations, the analyst adds, as these can expose foreign operators susceptible to added financial risks.
Although offshore Brazil was once thought of as a safe haven for oilfield service companies, almost half of all indigenous companies are now facing insolvency issues according to KPMG, including offshore construction companies Queiroz Galvao and OGX.
Low quality goods and services, failure to fulfil contract deadlines and strict local content rules have all conspired to block growth in the sector.
However, new opportunities may emerge as the government and Petrobras re-think the way forward. Early this year, the government launched the “PEDEFOR” program, designed to relax local content rulings and introducing new financial incentives for foreign companies.
Industry’s response has been positive, with Aker Solutions opening another subsea manufacturing center in Brazil in April.
As Petrobras puts upstream assets such as the Bauna, Golfinho, and Tartaruga fields onto the market, further amendments to presalt requirements and licensing methods may follow which, if implemented, could spur another wave of foreign investment, DW claims.
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