Petrobras Reports 2 Percent Rise In Domestic Output

Petrobras, the debt-laden state-owned energy major of Brazil, reported a 2-percent increase in domestic oil production for November, to 2.23 million barrels of oil equivalent daily. Total global production stood at 2.86 million bpoed, the company added.

Earlier this month, Petrobras reiterated its plans to sell US$4 billion worth of assets by the end of 2016, adding that it will also meet its divestment target for 2015 and 2016, which stands at US$15.1 billion. However, to date, it has reported sales worth US$10.7 billion, with all but five deals suspended by the federal auditing court of Brazil. These five assets, according to Petrobras, will bring in some US$3.3 billion in proceeds.

The auditing court based its ruling on the fact that a lot of Petrobras’ divestment negotiations were conducted behind close doors, which raised the risk of “illegal acts” taking place. The energy giant has been in the public eye for a couple of years now, after it emerged that members of its senior management were involved in a corruption network that also involved prominent politicians, among them former President Dilma Rousseff.

Rousseff was removed from office, to be replaced by political opponent Michel Temer, whose position is now also precarious. One of the business executives charged with partaking in the corruption network, Claudio Lemo Filho, from construction major Odebrecht, told investigators, after signing a collaboration agreement, that members of Temer’s party were also involved in the network, receiving millions of dollars to lobby for Odebrecht in Congress. Temer dismissed the allegations, saying that the contributions were voluntary and that Odebrecht did not expect anything in return.

These latest developments may divert public attention away from Petrobras, at least for a while, but even without the bribery scandal, the company remains saddled with the largest debt in the oil and gas industry globally, at US$123 billion.

By Irina Slav for Oilprice.com

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