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Petrobras cuts output target

RIO DE JANEIRO

Brazil’s state-run oil firm Petroleo Brasileiro cut its 2019 production target, sending its shares lower on concerns about how quickly the firm will be able to ramp up production.

Petrobras, as the firm is known, now expects output to average 2.7 million barrels of oil equivalent per day (boepd), in line with 2018, scrapping an earlier forecast that it could grow to 2.8 million boepd.

In comments to Reuters, Petrobras Chief Executive Roberto Castello Branco said he still saw a chance within the margin of the new target for production to grow this year and next. He said the lower target was an effort to recover credibility.

"Transparency is always better," said Castello Branco, who was appointed in January. "Petrobras has a history of promising and not delivering, and that’s why I made a point of lowering the target and setting a more realistic one."

Along with the lower target, Petrobras said in a securities filing that second-quarter oil and gas production rose 3.8 per cent from the prior quarter to 2.633 million boepd.

The increase fell short of investor expectations for the company, which is dramatically ramping up production in "pre-salt" fields.




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