As Petrobras responds to what its chief executive has called the “worse oil industry crisis in 100 years”, the state-controlled company will double its oil output cuts to 200,000 bpd (6 percent of total production) and shorten work hours.
Petrobras is cutting work hours to six from eight hours per day for 21,000 employees and deferring the payment of 10 percent to 30 percent of the salaries of managers.
As Russia and Saudi Arabia battle for their share of a market that has also been battered by the coronavirus pandemic, crude oil prices have crashed by around 60 percent year to date. A production cut of 100,000 bpd announced by Petrobras last week. In response to flagging crude prices, the company reduced capital expenditure plans and postponed dividend payments.
Chevron Corp is among the companies that have cut production. It slashed its 2020 production forecast in the Permian Basin by 20 percent. In recent weeks, joint ventures between the US company and Venezuela’s PDVSA have cancelled service contracts and procurement processes.
