Jan 29 Brazil’s state-led oil company Petrobras slashed its oil and natural gas reserves 20 percent on Friday as a plunge in oil prices, a heavy debt load, high costs and a corruption scandal choke off the potential of a decade of giant but expensive discoveries.
The cut, reported in a securities filing, reduced proven reserves to 10.52 billion barrels of oil and natural gas equivalent as of Dec. 31, their lowest since 2001, according to standards set by the U.S. Securities and Exchange Commission. Petrobras booked 13.13 billion boe a year earlier.
The announcement is one of the strongest statements yet of the sharp reversal of fortune at Petroleo Brasileiro SA , as the company is formally known. Reserves are a key factor in determining the company’s ability to borrow and provide a return on investment. When they fall, a company has drained existing fields, can no longer commercially exploit new discoveries, or both.
Brazil Energy Insight 
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