(Bloomberg) -- Petrobras plans to boost spending on new oil drilling and other projects by almost 9% to $111 billion in the next five-year plan.
The Brazilian oil giant’s eight-person executive office proposed that amount for the 2025-2029 period, according to a filing Monday. The plan still needs the approval of Petroleo Brasileiro SA’s board of directors and is scheduled to be released on Nov. 21.
Most of the outlays — roughly $77 billion — will go to exploration and production projects in Brazil and abroad. Chief Executive Officer Magda Chambriard said recently that Petrobras expects to drill more wells next year. Refining and related business lines such as fertilizer and logistics will account for about $20 billion in expenditures.
Overall crude and natural gas output is forecast to reach the equivalent of 3.2 million barrels a day by the end of the five-year timeline. That’s unchanged from the 2028 target set forth in the current long-range plan and may raise concern among analysts about the pace of output growth.
“We continue to suspect that the ramp up in upstream volumes could be more gradual than in the previous plan given the phasing of new production units,” Jefferies analysts Alejandro Demichelis and Pedro Baptista wrote in a note to clients.
Folha de S. Paulo earlier reported the proposal.
The state-controlled company also raised the regular dividend payout for the five-year span by $5 billion to at least $45 billion, or 13%, with the potential for another $10 billion in extraordinary payouts.
Petrobras’ American depositary receipts extended gains after the announcement, rising as much as 2.7% in New York. Preferred shares rose 2.5% in Sao Paulo.
Investors are still awaiting additional details about oil-price assumptions, debt targets and other variables underpinning the spending plan.
Chambriard, who rose through the ranks at Petrobras before helming Brazil’s oil regulator in the 2010s, has eased concerns that Petrobras would take costly detours into less-profitable renewable projects at the expense of offshore drilling that made th nation a key source of non-OPEC crude.
Petrobras won’t completely abandon renewables, even as it prioritizes self-sufficiency in fuel production, Brazilian Mines and Energy Minister Alexandre Silveira said on the sidelines of the G20 conference in Rio de Janeiro.
--With assistance from Leda Alvim and Martha Beck.
(Updates with analysts’ comment in fifth paragraph, Brazilian energy minister in final paragraph.)
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