(Updates with details of cost-cutting program, Ascent project)
SAO PAULO, May 7 (Reuters) - Brazil’s Braskem SA, Latin America’s largest petrochemical company, said on Thursday it was reconsidering a West Virginia shale gas project and planned to cut over $100 million in annual spending due to a drop in global oil prices.
Braskem announced the plans in its first-quarter earnings report, which showed a 49 percent drop in net profit, to 204 million reais ($67 million), from the year-ago period when asset sales boosted earnings.
Braskem’s focus on cost cutting and a more cautious expansion follows last year’s plunge in crude prices, which continues to ripple through the petrochemical supply chain.
“In view of the new levels of global oil and polyethylene prices, new scenarios are being incorporated into the analysis of the Appalachian Shale Cracker Enterprise (Ascent) project,” Braskem said in a securities filing, referring to the West Virginia shale gas project.
“The feasibility study will require more time than initially expected.”
Braskem also said it was making progress on plans to reduce its fixed costs by between 300 million reais and 400 million reais on an annual basis.
First-quarter earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, fell 9 percent to 1.487 billion reais, the company said.
$1 = 3.05 reais Reporting by Brad Haynes; Additional reporting by Walter Brandimarte and Alberto Alerigi Jr.; Editing by Paul Simao