Petrobras Hiring Personnel, Cutting Costs Elsewhere

NEW YORK (Dow Jones Newswires), Jan. 27, 2009

Brazil state-controlled oil giant Petroleo Brasileiro (PBR), or Petrobras, is hiring personnel and cutting costs in research and development and elsewhere, Chief Executive Officer Sergio Gabrielli said Tuesday.

"We are hiring," Gabrielli said. Most of Petrobras' workforce, or 60%, has been with the company for more than 18 years, Gabrielli said, and getting ready to retire. Moreover, labor costs are about 5% of the company's costs, which pale in comparison with other areas, such as capital-improvement expenses.

Large cost-cutting measures will come from standardization of R&D equipment and projects, Gabrielli said. Petrobras will go more for off-the-shelf equipment as opposed to tailor-made equipment, which is significantly more expensive, he said.

In addition, Petrobras will intensify talks with suppliers to lower costs, Gabrielli said. "We are going to be (tougher) in price negotiations with suppliers," he said.

Gabrielli made the comments moments before a Petrobras conference with analysts and other market participants in New York.  

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