Petrobras eyes debt reduction as theft soars

Brazil’s state giant Petrobras is hoping to bring its debt to less than 250% of earnings before interest, tax, depreciation and amortization (EBITDA) next year, CEO Pedro Parente told international media on Tuesday.

The company is one of the most indebted in the world, with its net debt at the end of 2016 at USD 96.4 billion and adjusted EBITDA at USD 25.6 billion.

Over the past year, the company paid off a fraction of the USD 100 billion debt it had accumulated at the end of 2015 and narrowed its net losses to USD 4.8 billion, down from a negative USD 11.3 billion a year earlier.

Nevertheless, a spike of gang violence linked to crude and fuel theft from Petrobras’ extensive pipeline network has brought attention to another growing problem the company faces.

“Not even Petrobras knows exactly how much is being stolen,” a top Rio de Janeiro police official told Reuters, adding that the company’s private security guards were afraid to confront the armed gangs. “It’s a huge business, moving millions of reais.”

In other related news, ExxonMobil has entered into talks with Petrobras to develop the country’s deep-water resources, the Wall Street Journal reported on Tuesday.