Brazil's Petrobras is set to reduce planned investments for next year, despite requests by the government for the state-run oil firm to increase CAPEX, three sources close to the matter told Reuters.
The firm foresaw $21 billion of investments for next year, but spending could be down to around $17 billion, according to initial estimates by the firm, said one source.
Petrobras did not immediately respond to a request for comment.
In its current 2024-2028 strategic plan, Petrobras is set to invest $102 billion, a 31% increase over the last plan, amid pressure from Brazil's President Luiz Inacio Lula da Silva for the firm to invest more and prop-up the country's economy while generating local jobs.
Petrobras wants to release a plan that is more "realistic," said one source. Sources did not say whether the 2025-2029 plan, set to be unveiled in November, would have lower CAPEX than the current one.
The 2025-2029 plan will prioritize projects that need lower investment and deliver higher and faster returns, said the sources. It would also include plans to open more oil and gas wells, they said.
The main concern is to increase oil and gas production, said a source, boosting the firm's earnings and "helping the country."
A rise in equipment prices and financing limitations were among the reasons cited by the sources for the lowering of investments next year.
The firm has also faced difficulties expanding activities in Brazil due to a lack of environmental licenses for exploration projects, the sources noted.
(Reuters - Reporting by Rodrigo Viga Gaier, writing by Fabio Teixeira, editing by Chris Reese)
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