UPDATE 1-Petrobras says cost of new oil rights to push back debt target
(Recasts with new debt estimates from Petrobras)
BRASILIA, June 27 (Reuters) - New oil rights awarded this week will saddle Brazilian state-run oil company Petrobras with at least $26 billion of new costs by 2030 and further delay efforts to reduce debt below an internal target, according to a Friday presentation.
In February, Petrobras said it aimed to bring the ratio of its net debt to capital below a "maximum limit" of 35 percent by 2015 as part of a five-year investment plan. In Friday's investor briefing, the company said leverage would reach 44.7 percent this year and will not fall below 35 percent until 2017.
Questions about the sustainability of that debt load have already been aggravated by the added cost of the new oil rights. Credit ratings firms expressed concerns earlier on Friday about the 15 billion reais ($6.85 billion) that Petrobras, known formally as Petroleo Brasileiro SA, will pay the government through 2018 to explore four fields off Brazil's southeast coast.
As Friday's presentation made clear, the government's bonus is just a fraction of the new spending involved. Between the government payments, exploration costs and test wells, Petrobras estimated on Friday that it will spend at least 56.5 billion reais on the new exploration areas by 2030.
The company plans to finance much of that spending with the additional output from areas acquired. Petrobras estimates the areas will lift daily oil production by 500,000 barrels to an average 4.2 million barrels per day from 2020 to 2030.
Still, the heavy upfront costs have some board members complaining that they were not consulted about the deal.
On Thursday, board members Silvio Sinedino and Mauro Cunha said they knew nothing of the oil-rights plan. Sinedino said he is considering a complaint to securities regulator CVM.
Planning Minister Miriam Belchior, whose post also gives her a seat on the Petrobras board, rebutted the criticism on Friday, telling reporters that the company had been authorized to search for new sources of oil and gas as part of its 2030 strategic plan.
The oil-rights deal will increase annual Petrobras investments by about 3 percent. The company will have to buy billions of dollars worth of oil platforms and equipment even as its debt soars and production falls short of current targets.
($1 = 2.20 Brazilian reais) (Reporting by Leonardo Goy; Writing by Asher Levine and Steve Orlofsky; Editing by Leslie Adler)
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