Brazilian state owned giant Petrobras has, as of Monday, a new CEO in the form of Maria das Gracas Foster. The new CEO made it clear that Petrobras’ focus will be on increasing output and boosting production.
The company has struggled in recent years to bring new oilfields online because of delivery delays, unplanned stoppages and increasingly stringent safety regulations. Shortfalls in output have meant that Petrobras has at times struggled to meet targets set out in its massive US$ 225 billion expansion programme for 2011 – 2015.
Some analysts have questioned the company’s decision to focus on the development of five new refining facilities in Brazil instead of areas that would produce a better return on investments.
Petrobras posted a disappointing 52% drop in earnings for Q4 of last year. This is partly due to the fact that the Brazilian government has decided to subsidise the price of oil (the international price of which has risen by 190%) in order to promote domestic consumption – the growing demand driven by this subsidy has seen Petrobras with no choice other than to import additional oil at international prices and then sell it at a significant loss to its domestic market.