(Recasts to add oil price performance, comments, background throughout)
By Marianna Parraga and Guillermo Parra-Bernal
HOUSTON/SAO PAULO, May 2 (Reuters) - Oil’s lackluster price performance this year is unlikely to hamper Petróleo Brasileiro SA’s plan to divest up to $21 billion worth of assets or find partners for exploration and refining by the end of next year, Chief Executive Officer Pedro Parente said on Tuesday.
Speaking at the Offshore Technology Conference in Houston, Parente said Petrobras has already made money in an unstable oil price environment, which could lure partners for certain businesses or projects. Rio de Janeiro-based Petrobras is Brazil’s state-controlled oil company.
Parente remains confident that Petrobras will be able to divest assets in segments from oil exploration and production to fuel retailing, meeting the year-end 2018 asset-sale and partnership target comfortably.
“We can only improve by having partners helping us to get more benefits ... I don’t see why the current oil price environment would create risks for our divestment plan,” he said on the sidelines of the conference.
His remarks sought to allay concern that a volatile oil market could slow or thwart plans to downsize Petrobras, the world’s most indebted oil company. After starting the year on a rally, oil prices have slumped as rising crude output in the United States and elsewhere has somewhat offset production cuts by Saudi Arabia and other major exporters looking to reduce a global crude glut.
Brent crude oil prices fell on Tuesday to their lowest level in more than five months, erasing all the gains since the Organization of Petroleum Exporting Countries began output cuts last November. Brent futures fell $1.06, or 2.1 percent, to settle at $50.46 a barrel, the lowest close since Nov. 29 - the day before OPEC agreed to cut supply.
Investors cut their net-long position in Brent oil, the crude benchmark most widely used for pricing by Petrobras, by 69,167 contracts to 358,266 in the week ended on April 25. That was the lowest since November. Net-long positions measure the difference between bets of a price increase and those of a price decline.
Parente cited geopolitical tension in the Middle East, sizable legal contingencies and missing asset-sale goals as potential risks for Petrobras’s financial and operational case going forward.
He wants Petrobras to focus on cutting costs as much as other Latin American oil companies are doing. At the end of 2016, the company’s lifting cost per barrel went down to $10.3 per barrel from $11.7 a barrel in 2015. (Additional reporting by Marta Nogueira in Rio de Janeiro and Roberto Samora in São Paulo; Editing by Chizu Nomiyama and David Gregorio)