SAO PAULO – The chief executive officer of Brazilian state oil company Petrobras said on Tuesday that important challenges lie ahead despite recent encouraging financial results.
“This is no time to celebrate. We’re at the start of a process and there’s a lot to do,” Pedro Parente, who took over as CEO in 2016 amid a huge bribes-for-inflated scandal that has landed politicians, Petrobras executives and leaders of major construction companies behind bars, said at the opening of a forum promoted by Sao Paulo business magazine Exame.
Petrobras posted net income of 4.4 billion reais (around $1.4 billion) in the first quarter of this year, compared to a net loss of 1.2 billion reais in the first three months of 2016.
Second-quarter earnings, which are due out this week, also are expected to bring more encouraging signs of recovery.
Even so, Parente recalled that the company’s gross debt, which stood at 364.8 billion reais in the first quarter, is equivalent to 70 percent of the cumulative debt of Brazil’s 27 states.
“It’s a critical matter,” Parente said, adding that most of the debt was due to construction projects that ended up being far over budget and a price policy that was below international standards.
“We need competitive prices, cost efficiency and debt management” to ensure consistent improvement in the company’s results, Parente said.
Parente also noted that Petrobras and all global oil companies must deal with major societal changes, including renewable fuels and the growing market for electric cars.
“What will the business be? No one knows. Over the next five years we’ll be looking more at what has to do with crude and gas,” the executive said.
Parente also referred to massive pre-salt reserves in ultra-deep waters of the Atlantic Ocean, saying that despite delays in developing those deposits that region remains one of the three most promising worldwide.