S&P Keeps Negative Bias on Petrobras After New Business Plan
SAO PAULO, July 14 (Reuters) - Standard & Poor's reiterated a negative outlook for Brazil's Petrobras on Tuesday, signaling the state-run oil company might soon lose its investment-grade rating despite its recent efforts to cut debt and restore investor confidence.
Petroleo Brasileiro SA, as the company is formally known, has slashed its long-term spending plan to an eight-year low as it grapples with the financial impact of a massive corruption scandal.
Petrobras holds approximately $120 billion in debt, more than any other oil company and enough to make it one of the most indebted industrial companies in the world.
S&P said Petrobras' updated business plan focused on debt reduction rather than on increasing production.
"The negative outlook continues to reflect Petrobras' challenges to deleverage its balance sheet and the uncertainties and contingent liabilities stemming from the ongoing corruption investigations," S&P analysts Renata Lotfi and Luciano Gremone wrote in a report.
S&P rates Petrobras at "BBB-," its lowest investment-grade level. The rating is supported by S&P's view that the Brazilian government is "very likely" to support the company in case of financial distress.
(Reporting by Walter Brandimarte; Editing by Lisa Von Ahn)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Operates 34 Offshore Rigs
Manages 10 Offshore Rigs
- Exxon, Petrobras Form Alliance To Develop Oil, Gas Projects (Dec 14)
- Natural Gas In Petrobras Pipelines Up About 23% In 2017 (Dec 05)
- Petrobras CEO Says To Discuss Refining Partnership With CNPC CEO (Nov 15)