Reuters: Global Markets: Petrobras CEO seeks "realistic" goals; shares fall

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Petrobras CEO seeks "realistic" goals; shares fall Jun 25th 2012, 16:26 RIO DE JANEIRO | Mon Jun 25, 2012 12:26pm EDT RIO DE JANEIRO (Reuters) - Shares of Brazil's state-led oil company Petrobras plunged more than 7 percent on Monday after its chief executive said the company has to be "more realistic" about its plans after consistently missing output targets. Poor production from its main offshore fields in the Campos Basin have crimped past production, and soaring costs for new fields and new refineries forced cuts in future output under the $237 billion five-year plan announced on June 14, Chief Executive Maria das Graças Foster told reporters and investors on Monday. Foster, who was appointed CEO in January, said Petrobras must improve its operational efficiency and better control the cost of the hundreds of ships, dozens of drilling and production platforms and other goods and services being ordered under the plan, the world's largest corporate investment program. "We need to reduce the operational costs of our company and I don't just mean the cost of the employees' year-end party," Foster said at an event at company headquarters in Rio de Janeiro. At 12:46 a.m. (1146 EDT) Petrobras preferred shares (PETR4.SA), the company's most-traded class of stock, was down 7.01 percent at 18.18 reais in Sao Paulo. Earlier it fell as much 7.3 percent, its biggest one-day decline since February. The stock dropped despite Petrobras' announcement Friday that it would raise gasoline prices 7.83 percent and diesel 3.94 percent effective Monday, the first fuel price rise since 2006. An increase was considered essential by Foster and many market analysts and investors to finance the 2012-2016 investment plan. Refining losses related to selling gasoline and diesel at levels below world prices were equal to half of all company profits in the 12 months ending March 31. (Reporting by Jeb Blount; Editing by Gerald E. McCormick and Sofina Mirza-Reid) Link this Share this Digg this Email Reprints

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