Petrobras Cuts Spending Plan

Petrobras Cuts Spending PlanPetrobras Cuts Spending Plan

State-controlled Petroleo 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, Reuters reported. 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% in the past year, while Brazil's currency, the real, has shed more than a third of its value against the US 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.