By Marta Nogueira
RIO DE JANEIRO Brazil's Petrobras may increase investments in its next five-year business plan by up to 10% over the previous one, which would place the state-run oil company's capital expenditures at around $86 billion, Chief Financial Officer Sergio Caetano Leite said in an interview on Monday.
The increase in the 2024-2028 plan, still being discussed, would include some $4 billion in inflation adjustments and between $1 billion and $4 billion for new projects, Leite said.
The plan, set to be published by year end, will be the first since President Luiz Inacio Lula da Silva took office in January pledging to increase investments by the oil giant while using it to drive a green transition.
Low carbon projects, Leite said, would account for a large part of the increase in investments expected for the new plan.
"We are going to adjust the plan for inflation and signal larger investments based on that correction," the executive said. "But there is indeed more money going to investments."
He said that if the low-carbon projects "are profitable and technically applicable, we might take those inflation-adjusted $82 billion up to $86 billion."
Last month, Petrobras CEO Jean Paul Prates told Reuters the company's next five-year business plan would keep total investments roughly in line with the last.
The 2023-2027 plan, approved last December, includes expenditures of $78 billion.
Even with the projected increase, Leite said, Petrobras expects to maintain its gross debt between $50 billion and $65 billion. That metric reached $58 billion in the second quarter, up 8.7% from the prior quarter.
"There is room for leverage of up to $65 billion, but we would not like to use all of that," he said.
"Petrobras generates a lot of cash, so we will continue to use part of the cash to invest. We are very careful with the company's indebtedness, we do not want to indebt Petrobras beyond what is reasonable."
Petrobras' net profit slipped 47% in the second quarter to 28.8 billion reais ($5.85 billion) amid a drop in global oil prices fuel prices.
Leite noted that the income drop was not as large as those reported by some global peers.
Exxon Mobil posted a 56% net income decrease in the period. Net profits slid 48% at Chevron, 56% at Shell and 49% at TotalEnergies.
"It is very likely that we will deliver a company at the end of the year with higher market cap and prepared for the future", Leite said. Petrobras shares are up 46% so far this year.
($1 = 4.9062 reais)
(By Marta Nogueira; Editing by David Gregorio)