Recently released figures have shown that the Brazilian giant Petrobras had to cut investment by 5.1% in 2011 as the company struggled to meet the demands made by its US$ 225 billion expansion plans.
The company has also recently announced that its Q4 profits had fallen by 52% (US$ 10.6 billion to US$ 5.05 billion) due to a combination of reduced oil output and a heavy tax burden that has seen Brazil actually increase the amount of gasoline that it imports.
This sharp decline in profits, coupled with news of a rig leasing deal that would see the company spend US$76.3 billion over the next 15 years, led to shares falling by 7.8%
Petrobras has long term goals of enabling Brazil to challenge the United States for the position of No.3 oil producer in the world by tripling output to 6.4 million bpd by 2020. Given the difficulties faced by the company at present, attaining this goal is likely to be a major challenge for the company’s new CEO, Maria das Graças Foster.
Further problems face Petrobras with regards to their recent US$ 76.3 billion rig lease deal, namely that: due to laws requiring a significant portion of the construction work to be done in Brazilian facilities, and with Brazil unlikely to have enough shipyards operational in time, the delivery of the rigs could take longer than anticipated.