Petrobras’ slowdown

In a period of crisis, not even Petrobras can pretend that nothing has happened. The company would announce its investment plan for the period 2009/2013. For the first time, the company would include the huge investment necessary to bring oil from the pre-salt layer. But crisis came, and what they have planned until september was threw in the trash can. Before that, the company, for instance, intended to issue bonds in order to get 5 billion dollars. But, as we know, market is not friendly for borrowers, even for five-stars companies like Petrobras. Some specialists have already reckoned that exploring oil from 7,000 meters deep will cost, at least, 600 billion dollars. Just to help you to understand what it means, the company last year previewed that it would invest 112 billion dollars until 2012 – before they figured out what the pre-salt meant.

With less liquidity and with the urgent need of producing this oil (first, because it helps in the cash flow, and second because some exploring licenses will expire in 2010), they now have to decide what to do first and what can be left behind. Something is certain: there is no money for everything.

Nobody knows what will happen. The executives will try to discover until december, when the company will announce, finally, its investment plan. But the company has already understood that times changed. Last tuesday, Jose Sergio Gabrielli, CEO of Petrobras, used the company’s TV Circuit to say to all workers to avoid unnecessary expenses. Business travels, events and even the end-of-the-year party were cancelled, in order to cut costs.