Measures to address the effects of the crisis include: taking out more loans; postponing dividend payments; and postponing new hires for 90 days.
Petrobras announced this Thursday (26) the measures it decided to adopt to face the impacts suffered by the COVID-19 pandemic and the oil price shock.
According to the company, the value of investments for 2020 will be reduced from US$12 billion to US$8.5 billion (US$7 billion in cash terms)…
“…mainly due to postponements of exploratory activities, interconnection of wells and construction of production and refining facilities, and the devaluation of the Real against the US dollar”.
The set of measures announced by the entity involves cutting production, taking out only more loans, postponing the payment of dividends to shareholders and postponing new hires for a period of 90 days.
“The company will assess market conditions and, if necessary, make new adjustments to oil production, always ensuring safety conditions for people, operations and processes.“, he stated.
Brent oil prices, which are the international benchmark, have fallen by almost 60% in 2020. All this amid the negative repercussions of the current pandemic on demand. In addition to the dispute for market share between Saudi Arabia and Russia, which should generate a “oversupply” (“oversupply”) of the commodity.
Petrobras: check out the list of measures to reduce costs and preserve cash announced by the company:
- Disbursement of committed credit lines, amounting to approximately US$1.4 billion, as announced on 03/20/2020;
- Disbursement of two new loan lines totaling R$3.5 billion;
- Postponement to 12/15/2020 of the payment of dividends based on the 2019 annual result, in the amount of R$1.7 billion. This proposal will be submitted for approval at the Annual General Meeting, which has been rescheduled for 04/27/2020.
- Postponement and reduction of human resources expenses, totaling R$2.4 billion, including postponement of overtime payments, under the Performance Bonus Program;
- Postponement of payment of 30% of the total monthly remuneration of the President, Directors, Executive Managers and General Managers;
- Cancellation of the level advancement and promotion processes for employees and level advancement of bonus functions in 2020;
- Reduction of 50% in the number of employees on partial on-call over the next three months and temporary suspension of all training;
- Reduction of investments scheduled for 2020 from US$12 billion to US$8.5 billion (US$7 billion in cash terms);
- Reduction in operating expenses by US$1.4 billion, including the hibernation of platforms operating in shallow water fields, suspension of new relevant contracts for a period of 90 days;
- Reduction of 100,000 bpd in its oil production by the end of March. Due to the “oversupply” of this product on the foreign market and the reduction in global demand.
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