Petrobras Threatens to Step Up Asset Sales on Fuel Losses
Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company, said it may sell more assets than previously planned if the government doesn’t allow it raise fuel prices to international norms.
“There’s no projection of when the price adjustment will happen,” Chief Financial Officer Almir Barbassa told reporters at an event in New York today. “But the company’s policy that we will have an average fuel price in Brazil in line with international levels still holds.”
If Petrobras can’t adjust fuel prices until it reviews its investment plans, one of the company’s options is to increase divestments, Barbassa said.
Petrobras plans to generate $14.8 billion from the sale and restructuring of assets, according to its 2012-2016 business plan. The company is seeking to focus on the development of the so-called pre-salt oil reserves under the Atlantic Ocean seabed.
The company said third-quarter profit slid 12 percent to 5.57 billion reais ($2.7 billion) on Oct. 26 after fuel imports pushed up costs and crude output fell. Fuel imports curb profit as imported gasoline and diesel prices exceed those in Brazil.
Petrobras increased prices for gasoline and diesel by 7.8 percent and 3.9 percent, respectively, on June 25, and then lifted diesel prices an additional 6 percent on July 12 to reduce the discount with international prices. Still, Petrobras sells imported fuel at a loss and strong demand from farmers during Brazil’s harvest season increased third-quarter imports, Jose Consenza, the head of refining at Petrobras, said Oct. 9.
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