Brazil’s Petrobras Deep Pockets: US$ 87 Bi to Spend at Home and Overseas

Petrobras, Brazil’s state-controlled oil company intends to invest US$ 12.1 billion in its foreign business between 2007 and 2011. The forecast was disclosed by the company, Monday, August 7, and is US$ 5.4 billion greater than the investment forecast made in the previous plan, for the period between 2006 and 2010.

According to a company press statement, exploration and production activities are going to receive 70.2% of the total.

The region that is going to receive the greatest volume of investment by the Brazilian state-owned company is Latin America. The region will receive US$ 3.3 billion, or 28% of the total. Petrobras’ objective is to lead the Latin American oil, natural gas, oil product and biofuel market.

Next in the list of main destinations for the company funds comes North America, with investment of US$ 2.8 billion (23%), mainly in the Gulf of Mexico, and Africa, with US$ 2 billion (16%), especially Nigeria and Angola.

Apart from exploration and production, Petrobras is going to turn 24.8% of the total, or US$ 3 billion, to refining and foreign trade. According to a company statement, the organization intends to "expand downstream activities in profitable markets with potential for growth". The term downstream refers to sales and distribution activities of oil products.

Of the total to be invested in the period, 33%, or almost US$ 4 billion, will be turned to new business. Part of the company strategy is also to appreciate and further internationalize the Petrobras brand.

Investment abroad will be made as follows: US$ 2.2 billion in 2007, US$ 2.8 billion in 2008, US$ 2.5 billion in 2009, US$ 2.3 billion in 2010 and US$ 2.3 billion in 2011. In total, including operations in Brazil, Petrobras is going to invest US$ 87.1 billion between 2007 and 2011.

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