Brazil’s state-owned energy company Petrobras on Wednesday unveiled its new five-year strategic plan, which includes a loosened dividend policy and higher capital expenditure (capex) projections. The company said in a bourse filing that it ended an old dividend policy that prevented it from paying extraordinary dividends for years. Under the new plan, the company will payout 60% of the difference between its operating cash flow and investment every quarter, as long as it makes profits and its gross debt remains under $65 billion.
Petrobras also set a minimum annual dividend payout of $4 billion in years when Brent crude averages more than $40 per barrel, regardless of its debt levels. Petrobras said it is expected to distribute $60 billion to $70 billion in total dividends in 2022-2026. Analysts and investors welcomed the move, with the company’s shares rising 4% by 1725 GMT, outperforming the 1.4% gain in Brazil’s benchmark index Bovespa.
Petrobras plans to spend $68 billion in 2022-2026, compared to $55 billion under its previous five-year plan. The additional capex is aimed to fund the company’s oil production expansion in Brazil’s offshore pre-salt region discovered in 2006. It also plans to allocate $1.8 billion toward decarbonisation steps which will include electrifying its offshore platforms and cutting gas flaring.
