Petrobras (PBR) Unveils $224B Investment Plan for Next Five Years

Petroleo Brasilero SA (NYSE: PBR) said today that it will maintain its aggressive expansion plan with $224 billion in investments over the next five years as it looks to develop the largest discovery in the Americas in three decades and more than double its output.

The latest investment budget of the state-run energy giant, disclosed early this morning, was ahead of the previous estimate looking for a range of $200 billion to $220 billion. The budget for the previous five years was $174.4 billion, covering 2009 to 2013.

With the investment, Petrobras will be one of the few major oil companies to invest boldly in the current market with oil prices lower and concerns over the state of the global economy. Also the company seems to be unconcerned over the issues surrounding the disaster in the Gulf of Mexico that has embattled BP PLC (NYSE: BP).

A majority of the investment will be focused on Petrobras' offshore reserves in the pre-salt region. The company has suggested that the development is expected to be complicated and expensive due to the depth of the reserves in this region. Elsewhere, Petrobras said it plans to invest $118.8 billion in exploration and production over the next five year period.

Petrobras is the largest company by market value in Latin America and plans to raise $25 billion in a share offering this year, which would be the largest stock sale in the Western Hemisphere in the last 10 years. The company also plans to acquire 5 billion barrels of oil reserves owned by the government with new stock this year.

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