Petroleo Brasileiro SA reduced investments by 25 percent and is accelerating asset disposals in its latest business plan as it downsizes to withstand low international oil prices amid Brazil’s deepest two-year recession on record.
The 2017-2021 plan, the first drafted under Chief Executive Officer Pedro Parente, focuses on accelerating debt reduction and retreating from peripheral businesses such as biofuels, fertilizers and petrochemicals, the state-controlled company said in a statement Tuesday. Petrobras, as the Rio de Janeiro-based oil producer is known, has reduced its five-year investment goal to $74.1 billion, down from from $98.4 billion in the most recent plan.
Investors are closely watching the company’s ability to reduce leverage after its debt surged during the commodities boom because it was subsidizing fuel imports as part of a government push to control inflation. Net debt-to-EBITDA is expected to fall to 2.5 in 2018, faster than the internal leverage targets set in previous plans.
Brazil Energy Insight 
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