Petrobras makes severe spending cut

RIO DE JANEIRO, June 30, 2015 – Brazilian state energy giant Petrobras has announced spending cuts of 37 percent over the next five years.

The cuts will be in effect over 2015-2019, the company said in a filing with the Sao Paulo Stock Exchange on Monday.

Investments for the previous five-year period covering 2014-2018 were initially set at around $221 billion, but will now be limited to $130 billion for 2015-2019, marking a 41-percent decrease in the new timeframe.

Petrobras has also scaled back its 2020 global production forecast from 5.3 million to 3.7 million barrels of oil equivalent per day.

The cuts will help to alleviate the company’s $120 billion in debt, although not to a satisfactory level, CEO Aldemir Bendine told reporters.

“Other oil majors are facing the same economic factors,” he said. “We’re in worse shape than the other majors because we started dealing with it later.”

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