Brazil's Petrobras: earnings down 36%

Brazil's state-run energy giant Petrobras said Monday that its net earnings fell 36 percent in 2012 from the year before -- the lowest result since 2004. Net earnings amounted to 21 billion reais, or $10.86 billion based on the average exchange rate for 2012, Petrobas said in a statement released after markets closed. It cited the depreciation of the real, higher fuel imports and operational costs as the reason for the drop in full-year net earnings. The local consultancy Economatica said it was the lowest profit figure since 2004. Fourth quarter net profit however soared 39 percent over the previous quarter and 53 percent year-on-year to 7.74 billion reais, mainly due to financial gains from the sale of government bonds and higher tax benefits. The company said it produced an average of 1.98 million barrels of crude oil per day in 2012, down two percent from the previous year. Production from deep-water offshore fields known as "pre-salt" reached a record of 214,000 barrels a day on December 27, although this represents only seven percent of the average annual crude output in Brazil. The pre-salt reserves, which were discovered in 2007, could hold more than 100 billion barrels of high-quality recoverable crude, according to estimates from Brazil's National Petroleum Agency. Petrobras hopes to double its oil output by 2020, based on a plan to invest $236.5 billion between now and 2016. But since 2003, Petrobras has failed to meet its annual production targets and its projects are running behind schedule. Last year, company head Maria das Gracas Foster revised down production estimates for 2020 from 4.9 million barrels per day to 4.2 million bpd. Brazil, which has the world's sixth-largest economy, is self-sufficient in oil, but imports petroleum products. In 2010, the South American powerhouse started importing gasoline to meet rising domestic demand, even though it has asked Petrobras to maintain price subsidies in order to keep inflation down. In recent months, the government of President Dilma Rousseff has allowed diesel prices to go up three times, and gasoline prices to be hiked twice.