Page 14 - LatAmOil Week 20 2020

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It is also going ahead with plans to divest $20- 30bn worth of assets, including but not limited to oil refineries, between 2020 and 2024.
Petrobras’ CEO Roberto Castello Branco has said he does not believe there is less demand among potential buyers for these assets – or that
recent market developments should affect the prices of eight refineries the firm is selling.
Company executives hope the sale will help the company pay down debts and generate cash for investment in the promising offshore pre-salt area. ™
Petrobras books impairment on E&P assets
BRAZIL’S state-run oil and gas company Petro- bras has taken a BRL65.3bn ($11.4bn) impair- ment on its exploration and production assets, but it still insists that its results have not yet been affected by the coronavirus (COVID-19) pandemic.
The impairment led to a net loss of BRL48.5bn ($8.5bn) in the first three months of the year, Petrobras said in its first-quarter results statement. The Rio de Janeiro-based company wrote off 100% of the value of its shallow-water assets and also warned that it did not expect to restart production at six high-cost production assets that it is currently trying to sell.
For its deepwater assets, including the large Marlim Sul oilfield, impairments reached BRL57.6bn ($10.1bn). Meanwhile, for its shallow-water fields, impairments came to BRL6.6bn ($1.2bn), and a further BRL1.1bn ($190mn) of write-downs were related to other unspecified assets, it said.
In the interim report, Petrobras reported
earnings before interest, taxes, depreciation and amortisation (EBITDA) of BRL36.9bn ($6.5bn). It also said that its first-quarter results had not been affected by the economic fallout from the coronavirus pandemic but stressed that it was likely to register the impact of these events later in the year.
Additionally, the firm warned that changes in consumer behaviour resulting from the coro- navirus pandemic were likely to be permanent, saying that the global oil market might never recover. “The company expects a lower level of demand in the long term, taking into account ... structural change in the world economy, with permanent effects arising from this economic shock, including changes observed in consumer habits, which tend to be permanent,” it said.
Petrobras lowered its estimate of long-term Brent prices from $65 per barrel to $50. It also predicted that Brent prices would average $25 a barrel in 2020, rising by $5 every year to reach $50 in 2025. ™
Brazil set to adopt new E27 gasoline specifications in August
BRAZIL is gearing up for the introduction of new specifications for E27 gasoline on August 3. Under the new standards, the Research Octane Number (RON) for E27 fuel will no longer be undefined; instead; it will have to reach minimum levels of 92 by the end of 2021 and of 93 by the end of 2022. At the same time, effective August 3, it will also have to have a specific mass of at least 720 kg per cubic metre at a tempera-
ture of 20 degrees Centigrade.
According to market participants polled by
Argus Media, the changes are likely to make imports of unblended gasoline more expensive, since suppliers will have to switch to denser gasoline components that have higher octane ratings in order to comply with specifications. Current standards allow for more extensive use of light naphtha and other blending components
that are less costly, the sources explained.
These expectations have helped to widen the pricegapbetweendomesticallyproducedgaso-
Both fields lie with the pre-salt zone (Image: Petrobras)
line and imported gasoline. 
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Week 20 21•May•2020