UPDATE 1-Brazil's Petrobras cuts spending plan on real, oil price slump
(Recasts to add details on adjusted investment plan)
SAO PAULO/RIO DE JANEIRO Oct 5 (Reuters) - State-controlled Petróleo Brasileiro SA , struggling with the biggest debt load among global oil firms, on Monday cut capital spending plans for this year and next by $11 billion in the wake of a slump in Brazil's currency and in oil prices.
In a securities filing, the company, commonly known as Petrobras, said planned investments will be cut to $25 billion and $19 billion for 2015 and 2016, respectively, from $28 billion and $27 billion previously. Budgeted costs plus operating expenses excluding purchases of raw materials were trimmed for this year and next as well, the filing said.
This is the second time in three months that the Rio de Janeiro-based company cut what was until recent years the largest investment plan in the oil industry. Oil prices fell nearly 50 percent in the past year, while Brazil's currency, the real, has shed more than a third of its value against the U.S. dollar.
Reuters reported last month that Petrobras could be forced to cut back investments further as the burden of falling oil prices, rising interest payments and a weak currency made the program obsolete.
Hailed as a return to reality after years of missed output goals and a giant corruption scandal that led to $17 billion of writedowns, the plan unveiled in June cut the 2015-2019 spending goal to $130 billion from $221 billion.
The company decided to keep unaltered a plan for the sale of non-essential assets for the 2015-2016 period at $15.1 billion, of which $700 million is expected to be raised this year and the remainder throughout next year. Oil and liquified natural gas output goals were also kept unchanged for the 2015-2019 period, the filing said. (Reporting by Guillermo Parra-Bernal and Marcelo Teixeira Wirth; Additional reporting by Jeb Blount in Rio de Janeiro; Editing by Grant McCool and Leslie Adler)
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