(Adds additional company comment, production and refining information, results, share price)
By Jeb Blount and Marta Nogueira
RIO DE JANEIRO, Aug 11 (Reuters) - State-run Brazilian oil company Petrobras on Monday reaffirmed its forecast for a 7.5 percent increase in Brazilian oil output in 2014, challenging growing concern the company will extend a decade of failure in meeting production targets.
The progress of installing new offshore oil-production ships and the connection of new wells to existing platforms make the company’s goal “fully realizable,” Jose Formigli, the company’s exploration and production chief, told reporters at a press conference at company headquarters in Rio de Janeiro.
“The flows per well have been mostly good,” Formigli said. “Things are evolving as we forecast.”
Formigli made his comments during a conference call with stock analysts and a press conference with journalists.
If Petroleo Brasileiro SA, as the company is formally known, meets its goal of 2.08 million barrels per day (bpd), it will be the biggest increase in average, annual output since 2005. Yet because output has fallen for the last two years, average daily output would still be lower than it was in January 2012.
Petrobras has struggled to boost output despite a $221 billion five-year expansion plan, one of the world’s largest-ever corporate spending programs. Stagnant production and government imposed fuel-price controls have caused company debt to rise. Petrobras is now the world’s most indebted and least profitable major oil company, according to Thomson Reuters data.
The Petrobras target has a margin of error of 1 percentage point. Petrobras preferred shares, the company’s most-traded class of stock, rose 3.69 percent in afternoon trading in Sao Paulo, its biggest one-day rise in three weeks.
The call and press conference were called to discuss the company’s second-quarter financial results announced late Friday. Petrobras’ profit fell 20 percent in the quarter from a year earlier.
Last week, a government source told Reuters that Petrobras would not meet its target because of continued delays in the startup of new offshore oil platforms.
Analyst Paula Kovarsky of Banco Itau-BBA said July 21 she expects output to grow 5.7 percent. Pavel Molchanov of Raymond James said last week he expects output to grow 3.5 percent.
Formigli said meeting Petrobras’ goal will require hard work. While platform stoppages for repairs are likely to be in line with 2013, the stoppages will be a bit higher in the second half of 2014 than in the first half.
And while production only grew 2.6 percent in the first six months, output surged in July, Petrobras said. The company produced 2.05 million bpd of oil last month in Brazil, the most since February 2012 and 8.6 percent more than a year earlier.
Petrobras also expects large cuts in money-losing gasoline and diesel imports thanks to growing Brazilian output of natural gas liquids, which can be easily distilled into gasoline, fuel transportation improvements and the planned Nov. 4 startup of RNEST, a new refinery near Recife, Brazil.
The refinery’s first refining train is expected to hit full output of 115,000 bpd in January and a second 115,000-bpd train is expected to start operating in May.
Petrobras expects output of refined products to rise 4 percent to 2.24 million bpd in the second half of 2014 from 2.15 million bpd in the first half. (Additional reporting by Rodrigo Viga Gaier; Writing by Walter Brandimarte and Jeb Blount; Editing by Jeffrey Benkoe, Peter Galloway and Lisa Shumaker)