Brazil Petrobras CEO: New Business Plan Ready 'In Weeks'

SAO PAULO - A new five-year investment plan for Brazil's government-run oil company, Petroleo Brasileiro SA (Petrobras), will be ready in the coming weeks, and investments will remain "high," the company's chief executive, Maria das Gracas Foster, said Tuesday.

"Petrobras grows and, in the coming weeks, we will have details about our business plan for the period between 2013 and 2017," Ms. Foster said at an event in Sao Paulo. "Our business plan will provide you with clear and objective goals."

The company will keep its investment levels "high" and is on track to produce six million barrels of crude oil per day by 2020, the executive said, declining to comment further on the issue.

The company also will disclose an update of its business plan for the period between 2012 and 2016, according to Ms. Foster.

Petrobras operates with five-year business plans, which are revised and updated every year.

She also said there is no discussion over changing the rules that require its suppliers to produce a certain amount of services and equipment in Brazil.

"There is no discussion neither to reduce nor to increase local content," Ms. Foster said.

Ms. Foster said the growth of Brazil's consumer market for gasoline makes up for any losses the company suffers by not passing on increases in international crude-oil prices. The global oil market is volatile, and prices have fallen recently due to the outlook for the euro-zone crisis and weak growth in the U.S., she said.

"What has been very important is the sustainability of the Brazilian economy. What we are in the end is a seller of fuel," Ms. Foster said.

Petrobras aims to stabilize domestic fuel prices by keeping them low when international oil prices are high, but then doesn't lower prices when crude oil declines. Some investors have complained, however, that Petrobras is missing out on some of the juicy profits that its rivals are making, and that is behind some of the share price declines.

The executive highlighted that, with the fall of crude-oil prices on the international market, fuel prices in Brazil are approaching parity with world levels.

Ms. Foster said Petrobras's shares have been punished by investors, but that much of the problem is the international crude-oil prices.

"What I say to the company's shareholders is to believe in the growth of value of the shares of the company," Ms. Foster said. "We have been penalized by investors. But our reserves should grow with new discoveries. It's a question of time [for the market to see this.]"

During Tuesday's medium session, the company's preferred share was down 0.09% at BRR19.02, while the main local stock market index, the Ibovespa, was up 0.03%.


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