By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Petrobras, Brazil’s state-led oil giant, announced that it has approved a plan to sell assets worth US$13.7 billion in 2015 and 2016 in order to cut costs and reduce its debts. The company is currently involved in a large-scale corruption scandal and has seen its finances tumble.
“The plan is part of the company’s financial planning which seeks to reduce leverage, preserve cash flow and concentrate in priority investments, especially production of petroleum and gas in Brazil in areas of high productivity and returns,” the Petrobras’ press statement released on Monday, March 2nd, to the press and shareholders explained.
The state-controlled company states that each and every sale operation will first be assessed and approved by its executive board and administrative council.
According to officials approximately thirty percent of the assets to be sold will be come from the exploration and production sector of the company, both in Brazil and abroad, forty percent from the gas and energy sector and the remaining thirty percent from the supply and distribution sector.
According to Petrobras the volume of assets to be sold now is larger than the US$5-11 billion target included in the company’s 2014-2018 Business Plan, released in February of 2014, before the corruption scandal erupted.
According to local news media Petrobras’ net debt jumped from US$62 billion at the beginning of 2012 to US$114 billion in September of 2014 and its debt continues to rise, since more than 75 percent of its debt is in U.S. dollars.
On Monday, Petrobras also announced it had hired PriceWaterhouseCoopers (PWC) to audit its financial reports for 2015 and 2016. PWC refused to audit the financial reports for the third quarter of 2014 due to the widespread corruption scandal that erupted last year. The non-audited balance for the third quarter of 2014 was released in January after being postponed twice.
The results showed a net profit of R$3.084 billion and represented a 38 percent decline from the second quarter of 2014 and a retraction of 9.9 percent in relation to the third quarter of 2013. Company officials have said that they plan to release the annual audited financial balance for 2014 by the end of May.