Brazil’s Petrobras Faces Difficult 2013 as Turnaround Stalls

From Fox Business

At stake is the company’s ability to stick to production goals while simultaneously undertaking one of the most ambitious investment projects in the global oil industry, a program that will require $237 billion of spending over the next five years.

Since taking office last year, Chief Executive Maria das Gracas Foster has sought to play down production expectations that had become overblown after a series of mammoth oil discoveries off the country’s southeastern coast. But Petrobras even risks falling short of its revised target of 2.02 million barrels of crude oil per day, plus-or-minus 2%.

Petrobras just hit the low end of the target last year with crude output of 1.98 million barrels a day, and Ms. Foster expects production to be similar in 2013. “It’s not going to be physically possible for us to produce more oil,” she said.

Maintenance shutdowns at aging offshore platforms will continue to damp output in the first half of 2013, although five new platforms will come on stream through the end of the year, the executive said.

The new platforms set the stage for significant output increases in 2014 that should help improve Petrobras‘s finances, which have become stretched by the company’s inability to raise gasoline and diesel prices enough due to government constraints.

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