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.