By Marta Nogueira
RIO DE JANEIRO (Reuters) – Brazil’s Petrobras may increase investments in its next five-year business plan by up to 10% over the previous one, which would place the state-run oil company’s capital expenditures at around $86 billion, Chief Financial Officer Sergio Caetano Leite said in an interview on Monday.
The increase in the 2024-2028 plan, still being discussed, would include some $4 billion in inflation adjustments and between $1 billion and $4 billion for new projects, Leite said.
The plan, set to be published by year end, will be the first since President Luiz Inacio Lula da Silva took office in January pledging to increase investments by the oil giant while using it to drive a green transition.
Low carbon projects, Leite said, would account for a large part of the increase in investments expected for the new plan.
“We are going to adjust the plan for inflation and signal larger investments based on that correction,” the executive said. “But there is indeed more money going to investments.”
He said that if the low-carbon projects “are profitable and technically applicable, we might take those inflation-adjusted $82 billion up to $86 billion.”
Last month, Petrobras CEO Jean Paul Prates told Reuters the company’s next five-year business plan would keep total investments roughly in line with the last.
The 2023-2027 plan, approved last December, includes expenditures of $78 billion.
Even with the projected increase, Leite said, Petrobras expects to maintain its gross debt between $50 billion and $65 billion. That metric reached $58 billion in the second quarter, up 8.7% from the prior quarter.
“There is room for leverage of up to $65 billion, but we would not like to use all of that,” he said.
“Petrobras generates a lot of cash, so we will continue to use part of the cash to invest. We are very careful with the company’s indebtedness, we do not want to indebt Petrobras beyond what is reasonable.”
Petrobras’ net profit slipped 47% in the second quarter to 28.8 billion reais ($5.85 billion) amid a drop in global oil prices fuel prices.
Leite noted that the income drop was not as large as those reported by some global peers.
Exxon Mobil posted a 56% net income decrease in the period. Net profits slid 48% at Chevron, 56% at Shell and 49% at TotalEnergies.
“It is very likely that we will deliver a company at the end of the year with higher market cap and prepared for the future”, Leite said. Petrobras shares are up 46% so far this year.
($1 = 4.9062 reais)
(By Marta Nogueira; Editing by David Gregorio)
Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
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