December 21, 2017 / 12:01 PM / in a year

UPDATE 3-Brazil's Petrobras to keep 2018-22 investment in line with prior plan

(Adds Parente comment on divestment, updates share price, paragraphs 5, 7)

By Alexandra Alper

RIO DE JANEIRO, Dec 21 (Reuters) - Brazil’s state-run oil company Petróleo Brasileiro SA said on Thursday it would nudge up investment in the 2018-22 period to $74.5 billion from a prior $74.1 billion forecast for 2017-21 as it seeks to boost output and shore up its finances.

Petrobras, as the company is known, said the lion’s share, about $60.3 billion, would go toward exploration and production, while a further $13.1 billion would be spent on refining and natural gas.

The world’s most indebted oil company also stuck to a debt target of 2.5 times earnings before interest, tax, depreciation and amortization (EBITDA) for December 2018, and kept a goal of $21 billion in divestments throughout 2017 and 2018.

The plan’s consistency reflects Chief Executive Officer Pedro Parente’s continued efforts to get the company back on track after a deep slump in oil prices and a huge corruption scandal that deeply shook investor confidence.

Petrobras preferred shares closed up 4.1 percent on Thursday, near the day’s high.

Parente’s first five-year plan after taking the helm in 2016 cut projected investment by 25 percent compared to the 2015-2019 forecast and sought to slash debt from 5.3 times EBITDA in 2015.

Petrobras said on Thursday it sold $4.5 billion in assets this year, as part of the plan. Parente said later that the company has a $47 billion portfolio to potentially divest, up $5 billion, or 12 percent, from the prior estimate.

But the company is also seeking to ramp up production, from a forecast 2.7 million barrels of oil equivalent per day (boed) on average in 2018 to 3.55 million boed by 2022.

To achieve that target, the company said 19 platforms were slated to be brought into production in the next five years, with eight going online next year.

Petrobras said 58 percent of its exploration and production spending in the next five years will go to the coveted offshore pre-salt layer, with $18.9 billion spent in the offshore Campos basin alone.

In October, the company won three blocks in the layer, where billions of barrels of oil are trapped under thousands of feet of salt beneath the ocean floor.

Brent crude prices should rise from an estimated $53 per barrel next year to $58 in 2019, Petrobras said. (Reporting by Alexandra Alper; Additional reporting by Leonardo Goy in Brasilia; Editing by Keith Weir, Bernadette Baum and David Gregorio)

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