Petrobras 'set to miss oil target'

Production plans: Petrobras raised oil output in June but government official thinks it will miss full-year target

Petrobras will probably not make its target for increased oil output this year because of continued delays in the start-up of new offshore oil platforms, a Brazilian government source has reportedly claimed.

The Rio de Janeiro-headquartered state oil giant is aiming to raise domestic oil output by 7.5%, plus or minus one percentage point from 2013's 1.93 million barrels per day of oil.

A source in Brazil’s government with direct knowledge of the situation who does not have permission to speak publicly on the issue made the claim to Reuters.

Petrobras officials did not immediately respond to requests for comment from the wire service.

Domestic oil and natural gas liquids output averaged 1.92 million bpd in the first quarter of 2014, down 1.9% from the last quarter of 2013.

In June, the oil major produced 2.00 million bpd in Brazilian crude output, up 1.5% from June 2013 and at a level not seen since December 2012.

Chief executive Maria das Gracas Foster said in May that she was still confident that the explorer could hit its annual target thanks to new pre-salt production in the oil-rich Santos and Campos basins.

The oil giant has seen record flows of as much as 520,000 gross bpd of oil from the pre-salt this year as new wells come online to a pair of floating production, storage and offloading vessels, the FPSO Cidade de Paraty and the FPSO Cidade de Sao Paulo.

However, the company has also faced late start-ups and output declines on other projects, constraining cash flows as results are also hit by a redundancy programme and government fuel subsidies.

It is also saddled with high levels of debt secured to finance its massive exploration and development programme under an ambitious $220 billion spending plan.

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