UPDATE ON 2016 PETROBRAS CHALLENGES

Brazilian state-run oil company Petrobras, cut its investment budget for the coming years and plans to raise more cash from the sale of assets, amid efforts to reduce its debt.

Petrobras on Tuesday said it would invest only $74 billion in the 2017-21 period, down from $98.4 billion projected for the 2015-19 period, announced in January.

Meanwhile, the company said it would seek to accelerate the sale of assets to reduce its debt to sell a total of ~ $20 billion in assets. By comparison, for 2015-16 period, the company had planned to sell only $15 billion in assets.

The company said it plans to leave biofuel production, distribution of gas liquid processing—the so called GLP—as well as production in fertilizer and petrochemicals, as part of its strategy to reduce costs.

With less investments and more assets sales planned, Petrobras said it seeks to reduce its net debt to EBITDA ratio to 2.5 times in 2018, from 5.3 times at the end of 2015. That ration was a direct consequence of the prices slump and the corruption scandal that shakes Petrobras.

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