Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR) raised its 2026 oil production and investment forecasts after reporting record output and stronger cash generation in the third quarter, executives said on the company’s earnings call.
The company now expects average oil production of 2.7 million to 2.8 million barrels per day for the year, up from an initial forecast of 2.5 million barrels per day. It also lifted its capital spending outlook to $21 billion to $22 billion from $16 billion to $17.4 billion.
President Magda Chambriard said Petrobras used a period of higher oil prices to accelerate investments and production. Executives attributed the gains to improved reservoir management, platform efficiency, additional well connections and faster project execution.
Production Gains Drive Higher Forecast
Executive Director and Financial Director of Investor Relations Fernando Melgarejo said third-quarter oil production exceeded 2.8 million barrels per day, up 12% from a year earlier. September production reached a monthly record of 2.9 million barrels per day.
Chambriard said better reservoir management helped reduce the annual production decline rate to about 3% from around 10%. She also said 11 platforms were operating above their original design capacity, creating about 280,000 barrels per day of additional capacity without capital spending on the platforms themselves. Connecting more wells and investing in subsurface equipment are still required, she said.
Melgarejo said those platforms had generated an average production gain of approximately 90,000 barrels per day based on figures through October. Petrobras has identified six more platforms for potential capacity increases, he said.
The revised annual production forecast accounts for scheduled fourth-quarter maintenance and a change in the Búzios field’s production-sharing arrangements. Melgarejo said Petrobras reached the field’s cost recovery ceiling and would begin sharing approximately 85,000 barrels per day with the federal government in the fourth quarter.
Spending and Cash Flow Outlook Raised
Petrobras invested $16.8 billion in the first nine months of 2026, including $6.4 billion in the third quarter, Melgarejo said. About 84% of capital spending was concentrated in exploration and production.
The higher full-year investment forecast reflects foreign exchange effects, faster construction progress on platforms and increased drilling and well tie-ins, according to Melgarejo. He said operating cash flow guidance was raised to $45 billion to $50 billion from $35 billion, reflecting increased production and higher Brent prices.
Third-quarter operating cash flow was $12 billion, more than 20% above the year-earlier period but 2% below the second quarter. Melgarejo attributed the sequential decline partly to lower Brent prices and working-capital effects, including receivables under a fuel subsidy program.
Melgarejo said adjusted earnings before interest, taxes, depreciation and amortization, excluding one-off events, reached BRL 18.4 billion, more than 50% above the prior-year quarter. Net income on the same basis was BRL 9.3 billion, up almost 80% year over year.
Gross debt stood at $70 billion at the end of September, while net debt was $57.8 billion, Melgarejo said. He added that Petrobras’ next strategic plan would be presented on November 23.
Fuel Pricing Under Review
Several analysts pressed executives on whether domestic gasoline and diesel prices remained within Petrobras’ pricing policy amid volatile international markets.
Angélica Laureano, executive director of logistics, commercialization and markets, said the company was not contemplating a structural change to its policy. She said Petrobras was discussing whether a situational adjustment was needed to address market conditions.
Later in the call, Laureano said Petrobras believed it could meet the policy for diesel by the end of the fiscal year, but questions remained about gasoline. The company was considering whether to extend the deadline for meeting the policy’s established limits, she said. Federal subsidies had also helped accommodate fuel prices, she added.
Chambriard said Petrobras was cautious about passing through price volatility after an earlier approach contributed to lost money and market share. Gasoline pricing also must account for competition from ethanol and the broader profitability of the company’s fuel portfolio, she said.
Refining and Exploration
Petrobras reported record diesel production of 769,000 barrels per day in the third quarter, with refineries operating at a 99% utilization rate, Melgarejo said. Domestic refined-product sales reached 1.85 million barrels per day, while oil and refined-product exports reached a record 1.25 million barrels per day.
In exploration, Chambriard said drilling at the Morpho well in the Equatorial Margin off Amapá resulted in three oil discoveries. Sylvia Anjos, executive director of exploration and production, said samples were being assessed to help refine models and select the next well to drill. Petrobras has licenses for three additional wells in the area, she said.
About Petroleo Brasileiro S.A.- Petrobras (NYSE:PBR)
Petróleo Brasileiro S.A., known as Petrobras, is an integrated energy company headquartered in Rio de Janeiro, Brazil. Founded in 1953, it is controlled by the Brazilian government and has publicly traded shares, including American depositary shares listed in the United States. Petrobras’s core business is exploring for and producing oil and natural gas, with a significant focus on offshore and deepwater fields, including Brazil’s pre-salt basins. The company also operates in refining, transportation, and the sale of oil, fuels, natural gas, and related energy products.
