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Exclusive-Petrobras investments may rise up to 10% in new 5-year plan, says CFO

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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)

 

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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