Brazil's state oil major Petrobras swung to a net loss in the second quarter, attributing it to unfavorable exchange rates and a one-off tax charge.
The net result came in at some $470 million but excluding the tax charge, Petrobras said, it would have posted a net profit of $5.4 billion. The company, however, presented the tax charge in a positive light.
"The main events were the exchange rate variation for the period - an effect between companies in the Petrobras System that has no cash effect or even equity effect - and the impact of adhering to the tax transaction - a decision deemed positive by the market because it ended billion-dollar disputes that brought great uncertainty to the company's cash flow."
Petrobras boasted its lowest debt level since the third quarter of 2008, at $26.3 billion, and a 12.5% increase in first-half capex, to $6.4 billion. Going forward, however, investment will shrink, with the figure for the full year getting revised down to between $13.5 billion and $14.5 billion, from $18.5 billion in earlier plans.
Petrobras plans a 31% increase in planned investments to $102 billion over the next five years. Of that, 72% was earmarked for oil and gas investment with a view to boosting the company's oil and gas output to 3.2 million barrels of oil equivalent daily from 2.8 million barrels of oil equivalent currently.
Earlier this week, Reuters cited unnamed sources as saying Petrobras had secured environmental licenses to boost production at two offshore oil fields-Mero and Buzios, both in the Santos Basin. The ramp-up at the two fields should add 66,000 bpd to Brazil's total output, of which 46,000 bpd from the Mero field and 20,000 bpd at the Buzios field. Of the total, 36,000 bpd will fall to Petrobras and the rest will be counted towards the output of the company's partners in the fields.
By Charles Kennedy for Oilprice.com
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