How Is Petrobras Weathering a Year of Uncertainty?
Latin America Practice Partner Steven Sandretto was featured in an Energy Advisor, a publication of The Dialogue, article on the Brazilian state oil company Petrobras and how it has fared throughout 2020. The company set an initial goal of signing five refinery sale agreements this year, but scheduling problems caused by the pandemic along with market volatility reduced that number to one. However, the company's oil and gas output in Brazil grew 9 percent during the first nine months of the year, and its production in the pre-salt area grew 32 percent. Mr. Sandretto explained that Petrobras' quick response to the challenges of the pandemic allowed for its swift recovery and subsequent growth.
"Due to the pandemic, Petrobras has experienced decreased demand for its fuels and stoppages at some of its production facilities. However, Petrobras acted swiftly to ensure its liquidity," he said. "The company sought to significantly cut costs and reduce its capex, and also embarked on an aggressive divestment program to reduce debt and focus on its core business...Increased pre-salt production, as well as Petrobras' divestment program, coupled with its cost-cutting measures, have allowed Petrobras to recover quickly from the pandemic and should result in the company being able to weather the coronavirus storm."