Petrobras is undergoing a winning divestment program that creates the liquidity it needs to focus on developing the pre-salt gems in its portfolio. The company has in the recent past held the dubious title of ‘world’s most indebted oil company’ (a title now conferred to Pemex) but has made great strides to reduce debt from USD 111 million in 2018 to USD 60 million at the end of Q3/2021, lowering the ratio of net debt-to-EBITDA from a figure above 2.3 in 2018 to a figure of 1.17 in Q3 of this year, a figure much more in line with global oil majors.
Petrobras has also managed to generate USD 2.9 billion of cash inflow in 2021 alone, the best year in divestment sales since the program has started, money that can be utilized in the pre-salt development program.
The path forward seems bright for Petrobras and Brazil, but with presidential elections scheduled for next year, the future viability of the divestment program stands in question. Hopefully, all politicians are mature enough to let Petrobras run its course for the 2022-2026 business plan.
Whether that will happen, only time will tell!!!