Brazil’s state-run Petrobras will probably not meet its oil production target for 2014 because of continued delays in the startup of new offshore oil platforms, a government source with direct knowledge of the situation told Reuters on Monday. Petroleo Brasileiro SA, as Petrobras is formally known, had set a goal of increasing oil output in Brazil by 7.5 percent in 2014, plus or minus one percentage point, compared with 2013.
If met, the target would be the company’s biggest one-year rise in Brazilian oil output since at least 2006. Brazil produced an average of 2.06 million barrels a day of oil and related natural gas liquids in 2013, 3.11 percent less than in 2012. Brazilian output fell 2 percent in 2012. Petrobras officials did not immediately respond to requests for comment. Lacking permission to speak on the record, the source asked for anonymity in exchange for the information.
Because of stagnant output, project delays and government-ordered fuel subsidies, Petrobras has seen its debt rise and cash drain away and is now the world’s most indebted and least profitable major oil company, according to Thomson Reuters data. Petrobras has spent between $22 billion and $47 billion a year since 2008, one of the largest corporate investment programs ever.
It has made large new discoveries in that period, but total output in Brazil and abroad fell for the last two years and is only 5.5 percent greater than in 2008. Petrobras’ preferred shares, the company’s most-traded class of stock, rose 2.3 percent on Monday to close at 19.45 reais in Sao Paulo. Trading had ended before news of the likely output target miss was reported.