Petrobras forecasts up to BRL 392 billion in dividends over the next five years

Petrobras’ new investment plan foresees the distribution of US$ 60 billion to US$ 70 billion (R$ 336 billion to R$ 392 billion, at current prices) in dividends over the next five years, an average of R$ 67 billion to R$78 billion per year.

The company also established a mandatory minimum value of US$4 billion (R$22 billion) per year, regardless of the result, as long as oil is above US$40 (R$224) per barrel. The new remuneration policy provides for the quarterly distribution of resources to shareholders.

In 2021, the company broke a record in the distribution of dividends, with the announcement of BRL 63.4 billion as a return on the profit of BRL 75.1 billion accumulated in the first half. The high payment amid soaring fuel prices was the target of criticism from the opposition and even government allies.

President Jair Bolsonaro himself (no party) spent weeks complaining about the company’s management, even claiming to have a desire to privatize it, statements that have become the target of investigations at the CVM (Securities Commission).

Petrobras justifies the changes in the dividend policy for having reached in the third quarter of 2021 its goal of reducing its gross debt to US$ 60 billion (R$ 336 billion), which was expected by the end of 2022.

The maximum amount foreseen for the distribution of dividends is greater than the investments projected by the plan, of US$ 68 billion (R$ 381 billion), which will be focused on oil exploration and production, mainly in the pre-salt.

In a conference with analysts on Thursday (25), the company’s Financial Director, Rodrigo Araújo, said that the improvement in the financial situation allows Petrobras to be “a company that returns its earnings to society and shareholders in general”.

The company calculates a return of US$ 100 billion (R$ 560 billion) to governments with the payment of taxes and the Federal Government’s share of dividends, which should be between US$ 20 and US$ 25 billion (R$ 112 to R$ 140 billion).

In the new shareholder remuneration policy, the state-owned company maintains the US$ 60 billion mark for its optimal debt, but admits to working in some periods with US$ 65 billion. With debt below the first mark, the company will distribute 60% of the difference between cash flow and investments.

At the conference to detail the business plan, the director of Institutional Relations and Sustainability at Petrobras, Roberto Ardenghy, countered criticism that the company has neglected warnings about the impacts of the energy transition in the oil sector.

“We are aware of the role of Petrobras and the oil companies in the context of the energy transition,” he said, arguing that the world will still need oil for a long time to come. “This transition is not going to happen overnight.”

The company argues that the market will start pricing emissions on oil production, which gives the pre-salt an advantage. “We have to be down-to-earth to understand that by improving our processes we can make a high contribution [para a redução das emissões]”, said the executive.

Petrobras’ environmental strategy will therefore be focused on reducing emissions from its operations. For that, it foresees US$ 1.8 billion (R$ 10 billion) in measures to decarbonize the activities. In September, stressed Ardenghy, the company committed to zero net emissions by 2050.

The view is questioned by experts, especially after the harsh warnings from COP26, the International Energy Agency and the Intergovernmental Panel on Climate Change about the immediate need to reduce the production of fossil fuels.

Ardenghy said that Petrobras will study renewable energy technologies such as offshore wind (offshore), hydrogen and geothermal energy. But there is no forecast of investments in generation projects in the horizon of the business plan.

The plan sets aside most of the resources for the implementation of 15 new platforms and their respective subsea equipment, which will raise the company’s oil and gas production to 3.2 million barrels per day in 2026.

One of these systems will be installed in the giant reserves discovered in the last decade in the ultra-deep waters of Sergipe, an area identified as the country’s next oil frontier after pre-salt, which had been neglected in previous plans.

With operations scheduled to start in 2026, the first unit in the region will produce 120,000 barrels of oil and deliver 4 million cubic meters of natural gas per day.

The company also set aside resources for the exploration of new frontiers on the coast of the North and Northeast regions, which today face challenges in environmental licensing, and in research to recover more oil from reservoirs already in operation.

A reservoir recovery program was launched with the expectation of increasing Brazil’s oil reserves by 20 billion barrels, a volume equivalent to the 23 billion already produced so far.

“The company continues to focus on what it does best, which is the exploration and production of oil and gas assets in deep and ultra-deep waters, especially pre-salt assets, where Petrobras has competitive advantages and manages to generate greater value” , said the president of the company, Joaquim Silva e Luna.