UPDATE 1-No need for Petrobras investment cut due to corruption probe -minister

miércoles 21 de enero de 2015 15:28 GYT

(Adds comments on electricity sector)

By Jeferson Ribeiro and Alonso Soto

BRASILIA Jan 21 (Reuters) - State-run Brazilian oil producer Petroleo Brasileiro SA does not need to curtail its multibillion-dollar investment plan because of a growing corruption scandal, Mines and Energy Minister Eduardo Braga told Reuters on Wednesday.

Revelations of price-fixing, bribery and political kickbacks at Petrobras, as the company is known, and a sharp fall in oil prices have locked the company out of capital markets and reduced revenue. As a result, company officials said in December they expect to cut back a five-year $221-billion investment plan.

When asked if Petrobras should reduce its investments, Braga said: "No, not necessarily, unless we have other factors."

Braga, who took office on Jan. 2, did not say which other factors he as referring to.

On Dec. 17, Jose Formigli, the Rio de Janeiro-based company's exploration and production chief, said investment would be cut to preserve cash and avoid new borrowing. Petrobras is the world's most indebted and least profitable oil industry major.

Chief Executive Maria das Graças Foster has said that spending "in principle, will be lower in 2015 than in 2014."

Braga said that the scandal is leading to a clean-up that will help shield Petrobras from political interference and that the company remains attractive to investors despite a 60 percent drop in its principal share price in five months.   Continuación...