Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company, had the outlook on its foreign currency bonds revised to negative from stable by Moody’s Investors Service, according to a statement from the ratings company.
The cut in the outlook for the Rio de Janeiro-based company known as Petrobras, “reflects the company’s rising debt levels,” Moody’s said. “We also see increasing linkage between Petrobras and the sovereign,” according to the statement yesterday.
The oil producer has lost a record $8 billion at its refining unit this year as Brazilian President Dilma Rousseff’s battle with inflation means the state-run company must sell imported gasoline below cost. Petrobras posted an unexpected loss in the second quarter, followed by a drop in profit in the third quarter that surprised analysts.
Moody’s said its decision was also based on the “uncertainty over the timing and delivery of production.”
Calls to Petrobras press office after regular business hours were not immediately returned.
Petrobras is heading for its first yearly output drop since 2004 as fields in the Campos basin off the coast of Rio de Janeiro state decline faster than the company expected.
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