Petrobras obliterates profit records, but long-term questions linger

Brazilian oil and gas giant Petrobras released its Q4 2021 earnings report on Wednesday and, as expected, it posted record profits. In fact, the oil major’s gains were not just an all-time personal best, they also outstripped the performance of all Brazilian publicly traded companies in history — and by some distance. 

The result comes as an incredible landmark for a company that just four years ago had become synonymous with corruption and was the world’s most indebted oil producer.

Petrobras closed out 2021 with net Q4 profits of BRL 31.5 billion (USD 6.2 billion), down 47.4 percent from the same quarter in 2020. Even so, the company managed total 2021 profits of BRL 106.6 billion — the fourth consecutive year of positive results. Before now, the company’s best annual result came in 2019, when it recorded BRL 40.1 billion in profit.

The government-controlled oil major also saw revenue increase by 66.4 percent to BRL 452.66 billion. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) measurements jumped 64.1 percent in 2021, to BRL 234.57 billion.

According to a statement released by the Brazilian Institute for Strategic Oil Studies (Ineep), Petrobras’s results were due “the reduction of the company’s production cost” and “the cash inflow from the sale of around BRL 30 billion of the company’s assets.”

“In addition, there was an impairment reversal of BRL 16.9 billion (due to the revision of projections for the average price of short-term Brent oil),” stated Petrobras on its balance sheet. Over the past...