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Petrobras cuts spending 25 percent, will sell assets

Staff Writer | September 21, 2016
Petrobras cut planned investments by 25 percent in a drive to reduce the largest debt burden among global petroleum producers and revive investor confidence.
Oil exploration   $74.1 billion in capital spending
Petrobras contributes about 10 percent of the nation's economic output and Brazil's government, the company's controlling shareholder, is counting on it to help pull the economy out of its worst recession in decades.

Petrobras pledged up to $74.1 billion in capital spending for the 2017-2021 period compared with a $98.4 billion target in the prior four-year 2015-2019 plan, according to a securities filing.

This program outlines Petrobras' smallest capital budget since 2006 and fell short of the $82.7 billion average forecast of eight analysts surveyed by Reuters.

Petrobras reaffirmed its goal of $15.1 billion in asset sales for the 2015-2016 period and plans to raise an additional $19.5 billion through divestments and partnerships between 2017 and 2018.

The company said it could sell as much as $40 billion of assets over the next 10 years.