UPDATE 1-Petrobras board approves dividend policy revision

(Adds share price down 2.5% on world oil prices)

RIO DE JANEIRO, Oct 28 (Reuters) - Brazil’s state-run oil firm Petroleo Brasileiro SA said on Wednesday its board of directors has approved a change in shareholders compensation policy to allow management to propose dividends compatible with the company’s cash generation even in years of accounting losses.

With the changes approved on Tuesday, Petrobras will be able to propose the payment of extraordinary dividends when its gross debt is below $60 billion dollars even in the absence of profit, the company said in a statement.

When gross debt is above $60 billion, Petrobras can propose the payment of dividends to shareholders when there is no profit as long as the company’s net has been reduced in the previous 12-month period “if management believes that the company’s financial sustainability will be preserved,” the statement said.

Petrobras shares retreated 2.5% in early trading on the Sao Paulo stock market on the fall in international oil prices.

Reporting by Luciano Costa; editing by Jason Neely, Kirsten Donovan

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