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Petrobras CEO warns of 'difficult' 2013

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(Globalpost/GlobalPost)

The chief executive of Brazil's state-run oil giant Petrobras, Maria das Gracas Foster, warned Tuesday that the company faces erratic output this year due to platform maintenance.

"2013 is going to be a more difficult year than 2012," especially until July and August, Foster said in a news conference.

"We don't have the conditions to physically increase domestic production," Foster said.

"We are shutting down platforms for maintenance," she said, adding the halts were necessary for "sustainable short-term production."

Foster said production will pick up in the second half of 2013 thanks to six new oil platforms that will be put into operation during the year.

Foster estimated 2013 production of about 1.98 million barrels of oil equivalent per day, in line with 2012 output but down 2.0 percent from 2011.

"This is a difficult year but we will overcome it," she said.

Recent adjustments have not been enough to eliminate the difference between international and domestic prices of gasoline and diesel due to the increase in the price of crude and the depreciation of the real, according to the company.

Due to the weaker real, the price of a barrel of Brent has gone up 17 percents, the Petrobras CEO said.

"We are constantly working toward price convergence," Foster said.

The Brazilian government, which controls the company, has limited price increases on diesel and especially gasoline in the country in recent years.

At the same time, domestic fuel demand as soared, forcing the country to import petroleum products since 2010.

Petrobras reported that 2012 net earnings plunged 36 percent from the prior year, to 21 billion reais, or $10.86 billion based on the average exchange rate for 2012.

The company cited the depreciation of the real, higher fuel imports and operational costs as the reason for the drop in net earnings.

The oil giant plans $236.5 billion in investments through 2016 under a plan to double its oil output to nearly five million barrels a day by 2020.

Production from the so-called "pre-salt" deepwater offshore fields reached a record of 214,000 barrels a day on December 27, although this represents only seven percent of the average annual crude output in Brazil.

The fields off Rio de Janeiro state could hold more than 100 billion barrels of high-quality crude and turn Brazil into one of the world's top exporters, according to the National Petroleum Agency.

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http://www.globalpost.com/dispatch/news/afp/130205/petrobras-ceo-warns-difficult-2013-0