(Repeats story with no changes to headline or text)
* Petrobras may hit reduced leverage target a year early-CEO
* Any new deepwater development will need financing through
* No plans to join other global producers in supply cuts
By Marta Nogueira and Simon Webb
NEW YORK, May 17 Brazil's state-controlled oil
company Petrobras will pay its first shareholder
dividend in three years if the company turns a profit in 2017,
Chief Executive Officer Pedro Parente said on Wednesday.
Parente took the helm of the world's most indebted energy
company a year ago and said he is ahead of schedule with an
aggressive restructuring plan to cut its $95 billion debt,
reduce costs and sell assets.
Petroleo Brasileiro SA, or Petrobras, made a record
operating profit in the first quarter and if that
continues throughout the year, chances are good that the firm
will pay a dividend, Parente told Reuters in an interview in New
"We really are keen to start paying dividends as fast as we
can," he said. "If at the end of the year I have a profit, we
would be more than happy to start paying dividends."
Petrobras' bylaws say that shareholders are entitled to
dividends if the company turns a profit, pending approval from
the board and considering factors such as cash requirements and
investment opportunities. Company executives have in the past
said Petrobras is not obliged to pay dividends on its profits.
Rising output in Brazil's prodigious offshore fields is
helping Parente turn Petrobras around from its nadir in 2014,
when the firm last paid dividends.
Then, investors lost confidence as Petrobras sank into a
political and financial maelstrom with the oil price fall
reducing its revenues, a corruption scandal swamping the company
and losses mounting due to government fuel subsidies.
Ratings firms downgraded Petrobras' creditworthiness,
landing the firm with a huge interest bill to service its debt,
which then stood at around $130 billion, accumulated to finance
development of massive reserves in Brazil's deep Atlantic
Parente says he was hopeful about hitting his key metric to
reduce leverage by the end of this year - a full year ahead of
"It is likely we will reach that target ... before 2018. I
hope, but I don't know." he said.
He is targeting reducing Petrobras' debt to 2.5 times its
adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) from 5.1 times EBITDA at the end of 2015.
At the end of the first quarter the ratio stood at 3.24.
Even if he hits that target, Parente has no plans to stop
reducing debt or to let up on asset sales.
"We're not going to stop our plan... This is not yet a
healthy leverage level for Petrobras," he said.
A more appropriate level that would put Petrobras in line
with global oil majors would be around 1.5 EBITDA, he said. He
has no plans, for now, to make that a new target.
Investors have rewarded Parente for the turnaround. The firm
achieved an interest rate of below 5 percent this week on a
five-year bond for the first time since the crisis, Parente
said. At the worst point, the rate was around 13 percent.
Parente said he would consider serving as chief executive
beyond the end of next year if the government that is elected in
2018 wants him to continue in the post. A full cycle of
management at the company would be four years, he said.
Petrobras has yet to decide whether it will participate in
three government auctions this year for oilfields, he said. If
it does, it will be go for deepwater fields, as operating there
is Petrobras' strength, he added.
The company will not adjust its five-year capital
expenditure plan of $75 billion through 2021 to finance the
development of new fields, Parente said, adding that the firm
would fund any expansion through cost reductions.
Petrobras will not bid for onshore or shallow water
oilfields, he said, and is committed to selling its
participation in onshore and shallow water fields as part of a
$21 billion divestment plan, he said.
He declined to say how much cash he hoped to raise with
Rising Brazilian output, both from Petrobras and from
international oil firms operating there, has contributed to a
strong rise in output from non-OPEC producers this year that is
making it hard for the Organization of the Petroleum Exporting
Countries to curb global supply and end a two-year glut.
Petrobras' crude exports rose to 725,000 barrels per day in
the first quarter, up 72 percent on the year. The rise came in
part because of higher output, but also because a recession in
Brazil has hit domestic oil demand. Output stood at 2.182
million bpd, up from 1.980 million bpd from the year earlier.
Parente declined to estimate exports for the full year, but
said his target was to ensure the country was a net oil exporter
and could keep expensive refined fuel imports to a minimum.
Brazil had no plans to join OPEC and non-OPEC producers in
curbing global supply, in part because the country's laws would
not permit it, he said.
OPEC meets next week to decided whether to extend output
cuts agreed in December, when it joined with top non-OPEC
producers such as Russia to reduce global supply in an effort to
boost oil prices.
(Writing by Simon Webb; Editing by Daniel Flynn and Tom Brown)