Petrobras, one of the most powerful companies in Latin America,
is in a quandary. The Brazilian state-run oil company needs to
increase production and revenues, and pursue an ambitious
investment program to explore oil reserves in hard to access,
BRAZIL PETROBRAS: On troubled waters
When it comes to pursuing its ambitious investment program, Petrobras remains undeterred by a mounting debt burden. Concern among equity investors, however, is growing. By Thierry Ogier
But, at the same time, investors - some of whom pumped $70
billion in a record share offering in September 2010 - have
become increasingly wary of the company's mounting debt
The reason is simple: in recent years, Petrobras' oil output
has been flat. Moreover, it has failed to meet its own
Yet Petrobras' ambitions remain undiminished. The company
says it intends to double its output by the end of the decade.
But is this achievable? It took 60 years for it to pump 2
million barrels per day; it now proposes to add the same amount
to its daily output in just seven years.
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