Petrobras cuts five year plan to $109 billion on cheap oil

Brazilian oil giant Petrobras cuts five-year plan to $109 billion on cheap oil. The state-controlled producer shifts from an expansion-heavy strategy toward more selective capital allocation as Brent crude lingers near $63 a barrel, well below earlier price assumptions.

The 2026 to 2030 business plan marks the first investment reduction under President Luiz Inacio Lula da Silva, highlighting the tension between political pressure for growth and investor demands for discipline.

Petrobras aims to do more with slightly less, without breaching its $75 billion gross debt ceiling or overhauling its dividend framework.

Why did Petrobras trim its five-year spending plan

Petrobras reduced planned investments by about 2 percent compared with its previous five-year strategy, cutting the headline figure from roughly $111 billion to $109 billion.

Executives and board members faced a new reality as Brent crude traded about $20 below the price level once used to justify more aggressive expansion.

The company framed the move as a way to preserve cash flow resilience while keeping strategic projects on track. Lower oil prices, concerns about global oversupply, and pressure to maintain credit metrics all combined to make a slightly leaner plan more attractive than a bigger but riskier spending program.

Did you know?
Some of Petrobras' deepest pre-salt wells operate at water depths beyond 2000 meters, which puts them among the most technically demanding offshore projects in the world.

How will the $109 billion be allocated across oil and gas projects?

Of the total $109 billion, Petrobras intends to commit about $91 billion to projects already under implementation or with advanced engineering, including a $10 billion slice that still requires final financing analysis.

The remaining capital sits in a conditional bucket that will move forward only as project maturity and economic conditions improve.

Roughly $78 billion of the plan is earmarked for exploration and production, with nearly three-quarters focused on Brazil's prized pre-salt fields in deep and ultradeep waters.

Around $20 billion will go to refining, fertilizers, and logistics, where the company will upgrade existing plants rather than build new refineries, and about $4 billion will support gas and low-carbon initiatives, such as biofuels and biomethane.

What does the new plan mean for production targets and pre-salt growth?

Even with slightly lower capex, Petrobras still targets robust growth in oil and gas output, anchored in high-margin pre-salt assets. The company expects to reach about 3.1 million barrels of oil equivalent per day in 2026 and to peak near 3.4 million boed between 2028 and 2029, driven by new floating production units in the Santos Basin.

The roadmap includes multiple new offshore platforms by 2030 and additional floating units under consideration for the period after that, as Petrobras intensifies development of large reservoirs already discovered.

Management also plans exploration campaigns in the Equatorial Margin and other frontier areas, although spending there will be cautious, with environmental and regulatory hurdles carefully monitored.

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How are dividends, debt, and politics shaping Petrobras' strategy

Under the new plan, Petrobras proposes regular dividend payouts of at least $45 billion over five years, down from a previous framework that allowed for up to $55 billion plus extra distributions in favorable scenarios.

The company removed any explicit commitment to extraordinary dividends, a change that may disappoint some income-focused investors.

At the same time, Petrobras kept its $75 billion gross debt ceiling and highlighted the need to balance shareholder returns with investment in future production and Brazil's energy infrastructure.

The government, as controlling shareholder, has favored strong payouts that support fiscal revenues, yet the Lula administration also pushed for more domestic investment, which forced the company to walk a fine line.

What are the risks and opportunities in Petrobras' new roadmap?

The main risk is that oil prices could fall further or remain depressed for longer, which would squeeze cash generation even under a leaner plan.

If Brent were to drop significantly below current levels, Petrobras might need another round of capital discipline, or it could face hard choices between dividends, debt targets, and project timing.

On the opportunity side, pre-salt barrels generally have low lifting costs and high productivity, so the portfolio remains competitive even in a softer price environment.

Any upside surprise in oil prices, or success in exploration frontiers such as the Equatorial Margin, could unlock more of the conditional investment tranche and support stronger cash returns later in the decade.

Looking ahead, Petrobras' strategy suggests a cautious but still growth-oriented stance, built around capital-efficient pre-salt developments and a modest push into gas and low-carbon businesses.

Investors and policymakers will watch how the company executes this $109 billion blueprint, since its choices will shape Brazil's energy mix, government revenues, and offshore supply chains well into the next decade.