UPDATE 6-Petrobras cuts spending again as oil-price drop bites
(Adds comment on market moves, updates prices)
By Jeb Blount and Guillermo Parra-Bernal
RIO DE JANEIRO/SAO PAULO Jan 12 (Reuters) - Petróleo Brasileiro SA, Brazil's state-controlled oil producer, on Tuesday slashed its investment budget for the third time in just over six months, to preserve cash to pay debt, the industry's largest.
With oil prices at about 12-year lows and the company's $15.1 billion asset sale stalled, Petrobras cut its 2015-2019 capital spending budget by a quarter to $98.4 billion from $130 billion in June, according to a securities filing.
With planned 2016 investments of $20 billion, versus $27 billion proposed in June, Petrobras also trimmed its outlook for oil production in Brazil this year by nearly 2 percent to 2.145 million barrels per day from 2.185 million bpd.
The production cut underscores the difficulties facing Chief Executive Officer Aldemir Bendine, as Brazil endures its worst recession in at least 25 years and its currency, the real, has gone into a tailspin.
"Every day Petrobras is under more and more pressure," said Fabio Fuzette, who runs Sao Paulo investment fund Antares Capital. "If oil prices stay low, I'm not very hopeful. We will likely see more of the same shortly."
Petrobras' preferred shares, the company's most-traded class of stock, fell 9.2 percent in Sao Paulo to 5.53 reais, their lowest since Aug 26, 2003. The shares are down 9.1 percent this month and 70 percent in the last year.
"Essentially the market is reacting to most news from Petrobras as bad news," said Luana Sigfried, an oil and gas analyst with Raymond James in Houston. "It's increasingly clear that the company is just trying to adjust to reality, and reality is that it's going to be a smaller and smaller company." Continuación...