UPDATE 2-Petrobras profit slumps as imports squeeze output, price gains
(Adds details on results, reasons for profit decline)
By Jeb Blount and Marta Nogueira
RIO DE JANEIRO Aug 8 (Reuters) - Profit at Brazilian state-run oil company Petrobras slumped 20 percent in the second quarter from a year earlier, the company said on Friday, as rising fuel imports, debt costs and operating expenses offset higher output and prices.
Net income at Petroleo Brasileiro SA, as the company is formally known, fell to 4.96 billion reais ($2.18 billion) in the three months ending June 30. That compares with 6.20 billion reais a year earlier.
The profit was nearly a third below the 7.04 billion-real average estimate of 10 analysts surveyed by Reuters.
Profit fell 8 percent compared with the first quarter.
The results reflected a tightening squeeze at Petrobras caused by the conflicting economic policy goals of its controlling shareholder, the Brazilian government.
A drive to develop giant, new offshore oil and gas resources has Petrobras spending $221 billion over five years on expansion, one of the world's largest corporate investment plans.
At the same time, the government has reduced the amount of cash the company has available to pay for those investments by forcing it to subsidize domestic gasoline and diesel fuel. The controls are aimed at helping the government control inflation. Continuación...