UPDATE 2-Petrobras board to discuss new dividend policy on Friday -source

(Recasts sourcing)

RIO DE JANEIRO, July 27 (Reuters) – The board of directors of Brazilian state-run oil company Petrobras is set to meet on Friday to discuss its new dividend policy and a potential share buyback program, a source familiar with the matter said on Thursday.

Executives at the firm previously said the new dividend policy was being prepared by a working group and expected to be voted on by the end of this month, with its second-quarter dividends likely to be already based on the new policy.

Petrobras did not immediately respond to an emailed request for comment. Newspaper Valor Economico first reported on the scheduled board meeting.

Markets are monitoring what the new policy will look like after the oil giant paid bumper dividends last year, even leapfrogging the biggest international oil producers.

Chief Executive Jean Paul Prates told Reuters earlier this month that investors should not get used to the blockbuster dividends they enjoyed last year, saying the new policy would be “adjusted” to the reality of a company investing in the future.

Analysts at Itau BBA mentioned in a Thursday note to clients that the clues provided by Petrobras so far are the new policy should be in line with global peers and include the possibility of repurchasing shares.

“In our scenario analysis of possible policies aligned with the majors, we estimate dividends in a range of $2.7-3.5 billion, or dividend per share of 1.0-1.3 real for the second quarter,” they said.

Shares of Petrobras were down 3.5% on Thursday, making it the biggest faller on Brazil’s benchmark stock index Bovespa , after the firm on Wednesday released its production and sales report showing oil output dipped slightly in the second quarter. (Reporting by Marta Nogueira; Writing by Gabriel Araujo; Editing by Chris Reese)

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