Brazil oil giant Petrobras to reduce investment plan by 5%: Report

The Brazil's state-run Petrobras oil company headquarters in Rio de Janeiro on Jan 28, 2016.
The Brazil's state-run Petrobras oil company headquarters in Rio de Janeiro on Jan 28, 2016.PHOTO: REUTERS

BRASILIA (REUTERS) - Petroleo Brasileiro will cut its 2016-2020 investment plan by 5 per cent to US$93 billion (S$132.6 billion) as the state-run oil company contends with dwindling oil prices and a massive corruption investigation, the O Globo newspaper reported on Sunday (Jan 31).

The embattled Brazilian company, known as Petrobras, could reduce its investments even further if a series of planned debt-reducing asset sales are completed, the paper reported without citing sources.

The press office of Petrobras did not respond immediately to an e-mailed request for comment.

The company, which has a US$130 billion debt pile, has already cut its investment plans to US$98.4 billion from US$130.3 billion and last month had its Moody's credit rating reduced to non-investment grade.

The potential for a boost from big oil discoveries off the coast of Brazil appear to have faded, meanwhile, with the company's announcement on Friday of a 20 per cent cut to its oil and gas reserves.

Petrobras' troubles have hit Singapore oil rig builders Keppel Corporation and Sembcorp Marine. They are facing potential default by their biggest customer, rig leasing company Sete Brazil, whose only client is Petrobras.