Petrobras Scales Back Five-Year Plan as Oil Prices Weigh on Spending

PBR +0.32% CL=F +0.73%

Brazil’s state-run oil giant Petrobras is preparing to slightly reduce its five-year investment plan for the first time under President Luiz Inácio Lula da Silva, reflecting pressure from weaker crude prices, sources told Reuters.

The company’s new 2025–2029 strategic plan, set for release Thursday, will cut planned capital expenditures by about 2%—from $111 billion to around $109 billion—marking the first decline since the Bolsonaro administration’s 2021–2025 roadmap. Despite the modest reduction, Petrobras aims to preserve financial stability without increasing debt or altering its dividend policy.

The adjustment comes as Brent crude trades near $62 per barrel, down from an average of $70.85 earlier this year. Executives say Petrobras must “do more with less,” focusing on expanding production and refining capacity mainly through upgrades to existing platforms and refineries.

The company plans to replicate the success of its Almirante Tamandaré floating production unit, which recently set a record of 270,000 barrels per day—well above its 225,000-bpd design capacity. Petrobras is also expected to renegotiate with suppliers and reassess select projects to rein in costs.

President Lula, who has encouraged Petrobras to invest aggressively in Brazil’s economic growth, faces a balancing act between maintaining energy expansion and adapting to lower global oil prices. For 2026, much of the company’s roughly $19.6 billion in investments is already committed, limiting flexibility for further cuts.

The new plan signals a pragmatic shift for Petrobras—still expanding production but tightening its belt in response to a softer oil market.

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