• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 1 min Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 3 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 1 day IMO 2020 could create fierce competition for scarce water resources
  • 3 hours Total nonsense in climate debate
  • 4 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 1 day IMO2020 To scrub or not to scrub
  • 15 hours Theresa May to Step Down
  • 1 day Devastating Sanctions: Iran and Venezuela hurting
  • 6 hours Will Canada drop Liberals, vote in Conservatives?
  • 1 day Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 7 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 3 hours Apple Boycott in China
  • 7 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

Corruption Scandal Will Cost Petrobras At Least $2.1 Billion

The Brazilian state-owned oil company has released its first financial statements in 8 months – and it doesn’t look good.

Petrobras has been embroiled in a corruption scandal that has weighed down its share price and sent shockwaves through Brazil’s political and economic establishment. Long held up as a national symbol, Petrobras is now struggling to regain its footing.

After the scandal surfaced – which consisted of an elaborate bribery and kickback scheme that went all the way to the top – Petrobras was unable to contain or even put a price tag on the financial losses related to the conspiracy. Related: How The Majors Are Playing The Oil Price Slump

However, the company has finally come up with a number: $2.1 billion in losses stemming directly from corruption. That number could rise further if investigators find more problems.

The damage done to Petrobras has rippled through the Brazilian economy. Billion dollar projects have been stalled and may not move forward. Less construction, bankruptcies and setbacks for contractors tied to Petrobras, and a general slowdown across the Brazilian oil and gas industry is expected to drag the Brazilian economy down. Brazil is projected to enter into a recession this year. Related: Exxon Urges U.S Congress To Soften LNG Export Laws

Petrobras also wrote down billions of dollars in assets that were overvalued, and stated that it will no longer pay dividends to shareholders.

Still, the release of financial figures is a sign of progress for the beleaguered firm. Having missed several previous deadlines, Petrobras risked triggering a technical default. The publication of financials will allow Petrobras to return to good standing with creditors and bond markets. A recent rise in its share price reflects more confidence in the company’s trajectory. Related: What Happens To US Shale When The Easy Money Runs Out?

But the future is uncertain. Petrobras still has to subsidize fuel for Brazilian consumers despite oil prices having fallen by half since 2014. Even before the drop in oil prices and the revelation of extensive graft, Petrobras was the world’s most indebted oil company. Now, trying to repair the damage, Petrobras has decided to slash capital expenditures by more than a third and is undertaking a large plan to divest itself of some assets in order to raise cash.

That will result in a much more modest production level over the long-term as the ambitious plans to tap ultra-deep pre-salt oil reserves and dramatically raise production will likely be unobtainable, at least to the extent the company had hoped. Petrobras will be able to proceed more gradually in the pre-salt, but a surge in production is unlikely for the foreseeable future.

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News