Brazil’s state-run oil company Petrobras, which slashed its five-year spending plan by 40 percent in June, will likely cut back further as growing debt costs, falling oil prices and a weak currency have already made the plan obsolete, two company sources told Reuters on Thursday.
Standard & Poor’s decision to cut Brazil’s sovereign credit rating to “junk” grade on Wednesday was followed by a separate downgrade for Petroleo Brasileiro SA, as Petrobras is known, on Thursday.
The sources said the downgrade will raise the cost of refinancing Petrobras’ more than $130 billion of debt and reduce the capital available to drill wells, build production ships and refineries and pay for infrastructure to boost output and revenue.
Brazil Energy Insight 
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