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Petroleo Brasileiro SA Petrobras ADR PBR

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Petrobras Posts Solid Q3 As Debt Reduction Resumes; Adjusts Dividend Policy

Allen Good, CFA Sector Strategist

Analyst Note

| Allen Good, CFA |

Petrobras reported adjusted EBITDA of BRL 33.4 billion for the third quarter compared with BRL 32.6 billion the year before as lower oil and gas prices were offset by higher production volumes, lower operating costs and capital spending. Based on the revised long-term price assumptions disclosed earlier this year, management revised 2021-25 capital spending down to $40 billion-50 billion, or $8 billion-10 billion per year, compared with the original $64 billion announced in the strategic plan. The predominance of capital spending reductions will be in exploratory and non-presalt assets. Only upstream projects with a Brent oil break-even price of $35/bbl or less were approved during the quarter.

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Company Profile

Business Description

Petrobras is a Brazil-based integrated energy company controlled by the Brazilian government. The company focuses on exploration and production for oil and gas in Brazilian offshore fields. Production in 2019 was 2.8 million barrels of oil equivalent a day (80% oil production), and reserves stood at 9.6 billion boe (85% oil). Petrobras operates 13 refineries in Brazil with capacity of 2.2 million barrels a day and distributes refined products and natural gas throughout Brazil.

Avenida Republica do Chile, 65
Rio de Janeiro, RJ, 20031-912, Brazil
T +55 2132244477
Sector Energy
Industry Oil & Gas Integrated
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 57,983