Petroleo Brasileiro SA (Petrobras) plans to divest $13.7 billion in 2015-16, up from the previously reported $5-11 billion in the company’s business and management plan for 2014-18.
In an effort to reduce leverage, preserve cash, and focus on priority investments, 40% of the divestment will comprise the company’s gas and power segment, 30% exploration and production in Brazil and abroad, and 30% downstream.
Petrobras notes the $13.7 billion is sensitive to market conditions, and changes in those conditions could cause the company to adjust its plans.
Moody’s last month revoked the company’s investment-grade rating because of “concerns with the ongoing investigation of corruption and possible liquidity pressures that may arise if the company is not able to timely deliver its audited financial statements,” Petrobras reported at the time.
The reduction came on the heels of the appointment of Alde Mir Bendine as the company’s chief executive officer. Maria das Gracas Silva Foster, who previously served in the role, and five other senior executives resigned the week before amid the corruption scandal (OGJ Online, Feb. 9, 2015).
Moody´s noted that Petrobras may endure challenging times in the coming years while attempting to reduce its debt, and may need more time than previously anticipated to reduce its leverage.