Petrobras to Export 50 Percent More Oil

Petrobras workers

By Reuters 05-13-2015 08:00:54

Brazil's state-run oil company Petrobras on Wednesday estimated nearly 50 percent growth in oil exports in 2015, thanks to new offshore output and as its refineries lack capacity to process more crude.

Petrobras expects to export 350,000 barrels of petroleum per day in 2015, up from 231,500 bpd in 2014, crude oil manager Fernando Colares Nogueira said at an event on Wednesday.

China and India will be the main buyers, rather than the United States, once a principal destination of Brazil's excess crude, Nogueira told reporters.

U.S. producers have ramped up domestic production, slashing the need for imports in the world's largest oil-consuming nation.

The exports could help Petrobras generate much-needed cash as it deals with lower oil prices and a development slowdown worsened by a massive corruption scandal. Heavy capital spending and years of fuel subsidies have caused borrowing to soar, making Petrobras the world's most indebted major oil company.

Petrobras output has been increasing this year, however, largely from offshore "subsalt" reserves south of Rio de Janeiro. All its refineries are operating at or near full capacity, with little room to process new output.

The subsalt region exploits oil trapped deep beneath the sea bed by a layer of salt and is home to some of the world's largest recent oil discoveries. While the oil is expensive to extract compared to less extreme environments, Nogueira said, operating there will be economically viable based on Petrobras' projections for oil prices this year and next.

At the same event, the director of oil agency ANP Magda Chambriard said Brazil should double its oil output by 2025.

Petrobras accounts for some 50 percent of Brazil's oil exports, Nogueira said, down from 70 percent in 2011.

Petrobras to Sue

Petrobras plans to sue five construction and engineering firms and their senior executives to recover about 1.3 billion reais ($440 million) lost in a corruption scandal, the company said Friday.

Petrobras has already sued two companies in conjunction with the federal prosecutors' office. It said in a securities filing it will launch three other civil suits but did not say where the suits will be filed.

The lawsuits will be part of a plan to win back at least 6 billion reais ($2 billion) written off against Petrobras' 2014 earnings.

"Petrobras is making all necessary efforts for the total recovery of the losses suffered and also for damages to its reputation," the company's executive director for legal affairs, Taisa Maciel, told the TV network GloboNews, which first reported on the lawsuits earlier Friday.

"In addition to these suits there will be other suits against other companies and other contracts in concert with advancing investigations," she said.

The corruption related write-downs were a result of a price-fixing, bribery and political kickback scheme that drove up the cost of refineries and other assets. Petrobras said the companies formed a cartel to steal from it.

Several construction and engineering firms have said Petrobras officials forced them to make illegal payments to executives and politicians.

Suits seeking 452 million reais against engineering firms Engevix and Mendes Junior and several of their senior executives were filed on April 30 and May 8, Petrobras said.

Lawsuits seeking 826 million reais from Galvão Engenharia, OAS Engenharia and Camargo Correa and several of their senior executives will be filed in the coming weeks, Petrobras added.

Engevix declined to comment on the matter. Mendes Junior said it had no comment because it has not yet been formally advised of the suit.

Galvão, OAS and Camargo Correa officials did not immediately respond to requests for comment.

($1 = 2.97 Brazilian reais)