Brazilian state-run oil company Petrobras reported on September 20, 2016, that the company cut its investment budget for the coming years and plans to raise more cash from the sale of assets, amid efforts to reduce its huge debt.
Petrobras announced that it will invest $74.1 billion between 2017 and 2021, a 25 % drop from the $98.4 billion promised between 2015 and 2019.
It will also sell $19.5 billion in assets in the next 2 years after selling $15.1 billion in the last two.
The company says it aims to produce 2.77 million barrels a day in 2021.
These 5-year projections have repeatedly plunged from $220.6 billion announced in 2014.
Petrobras’s shares rose 3.6% to R$13.51 in São Paulo early on Tuesday as investors welcomed the company’s aggressive investment cuts.
However, some analysts raised concerns over the feasibility of Petrobras’s plan to maintain production levels of 2.77m barrels a day of crude oil in Brazil by 2021 - roughly the same as previous forecasts.
With $124 billion of gross debt at the end of June 2016, Petrobras now ranks as the world’s most heavily-indebted oil company.
Moody’s stripped Petrobras of its investment-grade rating in February last year, followed by S&P in September, raising fears that Brazil’s already impoverished government would be forced to offer some form of bailout.