Brazil’s state-owned oil and gas company, Petróleo Brasileiro S.A. (NYSE), commonly known as Petrobras, has reduced its capital expenditure (capex) for 2025 from $21 billion to $17 billion. The company stated that this adjustment reflects a more realistic outlook based on its financial capabilities.
In its latest strategic plan, Petrobras outlined plans to invest $102 billion between 2024 and 2028. This marks a 31% increase over the previous investment plan. The decision comes as Brazil’s President Luiz Inacio Lula da Silva has urged Petrobras to increase investments to help boost the country’s economy and create jobs.
A report from global research and consulting firm Wood Mackenzie forecasts that Brazil’s private oil companies will boost oil production by 75%, rising from 1.221 million barrels per day (Mb/d) to 2.123 Mb/d by 2030. Wood Mackenzie highlights that international oil companies, including Shell Plc (NYSE), Equinor ASA (NYSE), TotalEnergies SE (NYSE), Repsol Sinopec Brasil S.A., and Petrogal, will be among the leading producers due to their partnerships with Petrobras in the pre-salt regions and other developing fields.
Currently, Brazil’s oil and gas production is at record levels. Oil output has increased by 18.6% year-over-year, reaching 3.51 million barrels per day, while natural gas production has risen by 13.6% year-over-year to 154.08 million cubic meters per day.
In August, Petrobras and Colombia’s Ecopetrol S.A. (NYSE) announced a natural gas discovery at the Uchuva-2 well, located off Colombia’s coast. The Uchuva-2 well is a deepwater site where natural gas was previously discovered at the nearby Uchuva-1 well, drilled in 2022.
A Petrobras official noted that the promising potential of this area could support a large project for supplying natural gas to Colombia and for export.
In July, Bank of America upgraded Petrobras shares from Neutral to Buy, raising the price target from $16.80 to $17.90, which represents a 21% potential upside from the current price. This upgrade follows significant developments since the company’s CEO change, which have alleviated concerns regarding corporate governance, fuel pricing, and dividends.
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