The Brazilian state-owned oil company Petrobras reduced the minimum cash level needed for its $111 billion strategic plan on Thursday and authorized a payout of 20 billion reais ($3.4 billion) in special dividends to shareholders.
As special dividends for the 2023 period, Petrobras stated in a securities filing that around 15.6 billion reais of the payout would come from a capital reserve that housed cash that investors had anticipated would be distributed months ago.
The 2023 funds’ distribution resolves a dispute that shook Petrobras earlier this year when its stock fell a day after its board decided in March to forgo more dividends anticipated in 2023, a move that many perceived as political meddling by the Brazilian government.
According to Petrobras’s separate securities filing, its board authorized a $111 billion investment plan for 2025–2029 on Thursday. This plan was in line with the company’s management’s proposal, but it had a lower minimum cash level of $6 billion than the $8 billion in the previous 2024–2028 plan.
Fernando Melgarejo, the company’s chief financial officer, had stated in October that Petrobras was thinking of raising its minimum cash level and would give shareholders any extra money.
According to the corporation, the remaining 4.4 billion reais that were declared on Thursday represent dividends from profits made up to September of this year. According to Petrobras, the entire compensation amounts to 1.55 real ($0.27) per share.
The company’s “robust” free cash flow, according to Petrobras’ new strategic plan, supports an ordinary dividend prediction of $45 billion to $55 billion over the next five years, with the possibility of up to $10 billion in additional dividends over that time.
In addition to the $73 billion allocated for exploration and production activities in the previous plan, Petrobras would distribute $77 billion of the $111 billion in investments authorized for the five years.
Along with estimating production of roughly 3.2 million barrels of oil equivalent per day over that time, it also allocates roughly $20 billion for the Refining, Transportation, Marketing, Petrochemicals, and Fertilizers division.
According to Petrobras, the new plan designated $16.3 billion for low-carbon efforts, which is almost 42% more than the prior plan.
