Our Board of Directors approved, at a meeting held today, the signing of agreements to close eleven individual law suits filed at the Federal Court of New York, USA, by Abbey Life Assurance Company Limited (and others), Aberdeen Emerging Markets Fund (and others), Aberdeen Latin American Income Fund Limited (and others), Danske (and others), Delaware Enhanced Global Dividend and Income Fund (and others), Dimensional Emerging Markets Fund (and others), Manning & Napier Advisors, LLC, (and others), Russell Investment Company (and others), Skagen (and others), State of Alaska Department of Revenue, Treasury Division (and others), State Street Cayman Trust Co., Ltd, and Ohio Public Employees Retirement System. We had already signed agreements to terminate four other individual suits filed at the Federal Court of New York, USA, as reported on October 21, 2016.
This Tuesday, we completed the sale transaction for our stakes in exploratory block BM-S-8 to Statoil Brazil Oil and Gas LTDA, as announced on July 29, 2016.
Our total oil and natural gas output in October was 2.81 million barrels of oil equivalent per day (boed), of which 2.68 million boed produced in Brazil, while 0.12 million boed abroad.
The average oil output in Brazil was 2.19 million barrels per day (bpd), down 2 percent compared to September, when there was record production. This result was due mainly to maintenance shutdowns at FPSOs Cidade de Anchieta and Capixaba, both in Parque das Baleias, and at FPSO Cidade Angra dos Reis, in Lula. Performance so far shows that we are heading towards the annual oil output target set for Brazil, of 2.145 million bpd.
• Net loss of R$ 16,458 million, compared to net income of R$ 370 million in the 2Q-2016, as a result of:
- Impairment of assets and investment in associates of R$ 15,709 million, due to the review of assumptions, such as Brent prices and long term exchange rates, and the portfolio of investments in the context of the 2017-2021 Business and Management Plan, finalized and approved in 3Q-2016 , as well as the appreciation of the real and the increase in discount rates;
- Reclassification of foreign exchange losses, due to the sale of Petrobras Argentina (PESA);
- Higher expenses with the new Voluntary Separation Incentive Plan;
Today, we completed the acquisition of 33.6 percent of the stakes of the Río Neuquén concession, in Argentina, and of 100 percent of the interests in the Colpa Caranda asset, in Bolivia, for $56 million. The assets belonged to Petrobras Argentina and were repurchased because of their strategic value to Petrobras. In July, as announced, we sold our 67.19 percent stakes in Petrobras Argentina (PESA), owned by Petrobras Participaciones S.L. (PPSL), to Pampa Energía for $897 million.
We have reason to have a "cautious and justified hope that we have been put back on a path of steady and consistent recovery," said our CEO, Pedro Parente, at the opening ceremony of the Rio Oil & Gas Expo and Conference, on Monday, in Rio de Janeiro. To him, the oil and gas industry can respond quickly to stable rules in the sector. "I can state without a doubt that many billions of dollars await only for proper and stable rules to start flowing. Petrobras and its partnership and divestments program alone will account for investments of around $95 billion over the next five years - of which $75 billion own and $20 billion of partners," he noted.
Our CEO, Pedro Parente, and the CEO of Total, Patrick Pouyanne, signed, on Monday, in Rio de Janeiro, a memorandum of understanding (MOU) to consolidate a strategic alliance in the Exploration & Production (E&P) and Gas & Power (G&P) segments in Brazil and for potential opportunities abroad.
Under this MOU, the companies commit to jointly evaluate opportunities in Brazil and abroad in key areas of mutual interest, leveraging their recognized experience in all segments of the oil and gas chain.
Our total oil and natural gas output in September was 2.88 million barrels of oil equivalent per day (boed), of which 2.75 million boed produced in Brazil, while 130,000 boed abroad. This is a 1.4 percent increase in the company's total production compared to August.
The total oil and gas output in Brazil is a new monthly record, having surpassed the 2.72 million boed achieved in August 2016. The average oil output in the country, which added up to 2.24 million barrels per day (bpd) in September, also set a new record.
At a meeting held on Monday, our Board of Directors approved the sale of 100 percent of our interests in Nansei Seikyu (NSS) to Taiyo Oil Company.
NSS is a company located on the island of Okinawa, Japan, and is wholly owned by Petrobras International BRASPETRO - PIB BV. It has a refinery with a processing capacity of 100,000 barrels of oil per day, 36 tanks that can store 9.5 million barrels of oil and oil products, in addition to three piers for vessel loading and unloading and a monobuoy. The refinery and the monobuoy are currently hibernated. By providing terminal services, NSS serves about half of the Okinawa market.
The new policy will be based on two factors: Parity with the international market - also known as PIP, which includes costs such as chartering vessels, internal transport costs, and port charges - plus a margin to be practiced to remunerate risks inherent in the operation, e.g., volatility in the exchange rate and port stay prices, as well as profits and taxes. The executive board has decided that we will not practice prices below this international parity.