Brazilian oil producer Petrobras open to additional dividends this year

Fabio Teixeira and Marta Nogueira

RIO DE JANEIRO (Reuters) – Brazilian state oil company Petrobras will pay extraordinary dividends if there is an “opportunity” to do so, Chief Financial Officer Fernando Melgarejo told investors on a financial results conference call on Friday.

The decision on an extraordinary dividend payment will depend on cash conditions and future cash generation capabilities, Melgarejo said, adding that “an extraordinary dividend payment in 2024 is not ruled out.”

The comments came after Petrobras on Thursday reported worse-than-expected second-quarter results, posting a net loss of 2.6 billion reais ($472.22 million) and cutting its investment estimates.

Nevertheless, the company paid dividends totaling 13.57 billion reais, to which it used 6.4 billion reais from capital reserves.

Jefferies analysts said in a note that the investor call sent a “reassuring message,” adding that production remained in line with forecasts despite platform outages and difficulties in obtaining environmental licenses.

The reduction in 2024 capital expenditure estimates was due to changes in exploration and production strategy and a delay in refining investments. The company intends to invest more next year than in 2024, Melgarejo said.

Analysts at BTG Bank say a reduction in investment estimates for 2024 could pave the way for extraordinary dividends.

Petrobras’ preferred shares on the Sao Paulo Stock Exchange fell 3.4% in morning trading but recovered losses soon after to fall 0.5% by early afternoon.

(1 dollar = 5.5059 reais)

(Reporting by Fabio Teixeira, Marta Nogueira and Roberto Samora; editing by Gabriel Araujo and Rod Nickel)