Brazil’s state-owned oil giant Petrobras has presented a loss of R$21.6 billion ($7.2 billion) for the year 2014.

According to Petrobras, the loss is mainly due to an asset impairment charge of R$44.6 billion, a write-down of improperly capitalized additional spending within the scope of the Federal Police’s “Operação Lava Jato” anti-corruption probe (R$6.2 billion), a provision for losses from power sector receivables (R$4.5 billion), write-downs related to the construction of the Premium I and II refineries (R$2.8 billion), and a provision for the Program to Encourage Voluntary Severance (PIDV) (R$2.4 billion).

In the third quarter of 2014, a loss of R$5.3 billion was made. The difference in relation to the R$3.1 billion net earnings reported on January 27, 2015 reflects the write-down of improperly capitalized additional spending within the scope of Operação Lava Jato (R$6.2 billion), as well as an extra R$1.6 billion provision for losses from power sector receivables.

The R$26.6 billion loss in the fourth quarter of 2014 reflected the asset impairment. The company says that most of this loss was related to refining activities, due to project planning problems, the use of a discount rate with a higher risk premium, the postponement of expected cash inflow and lower economic growth. In exploration and production, the impairment resulted from the decline in oil prices.

As an operational highlight, Petrobras’ oil and natural gas production (in Brazil and abroad) grew by 5% in relation to 2013, reaching an average of 2.669 million barrels of oil equivalent per day (boed) in 2014. Pre-salt production contributed 381,000 bpd during the year, with record daily oil production of 713,000 barrels achieved on December 21.

During the year, four new platforms came on line and 87 new wells were interconnected in Brazil.

In refining, total production of oil products in 2014 was 2.170 million bpd, up 2% from 2013. The first part of the RNEST refinery began operating in November.

Investments totaled R$87.1 billion in 2014, down 17% from 2013.

The company ended the year with R$68.9 billion ($22.9 billion) in cash.

Source: www.offshoreenergytoday.com

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