Petrobras to cut up to 15 billion reais in 2013: report

Published October 19, 2012

| Reuters

Brazil state-led oil company Petrobras plans to cut between 5 billion reais ($2.5 billion) and 15 billion reais ($7.43 billion) from its operational costs in 2013, Brazilian newspaper O Globo reported on Friday.

The cuts are part of Petrobras' "Procop" cost-optimization program and were announced in an internal company presentation on Thursday by Chief Executive Maria das Gra��as Foster, the newspaper reported.

Petrobras' press office did not immediately return requests for comment.

The plan is aimed at helping Foster find ways to revive stagnant production and boost cash flow to pay for a $237 billion five-year expansion plan, the world's largest corporate investment program.

Despite huge spending levels and the discovery of some of the world's largest offshore oil fields in the past five years, Petrobras has missed all its annual production targets for a decade, and August oil and natural gas output fell to a 22-month low.

For the second quarter, Petrobras posted a 1.35 billion real loss, its first in 13 years.

Procop is focused on areas that accounted for 63 billion reais ($31 billion) of spending in 2011, the "manageable portion" of the company's 199 billion reais of outlays registered in Petrobras' 2011 accounts as cost of goods sold and operational expenses, the company said in a statement on Thursday.

The statement said the company had identified 28 areas where costs and "optimizations" could be made, but did not say how much it planned to save with its program.

(This story is corrected to say cuts in reais not dollars)

(Reporting by Jeb Blount; Editing by Lisa Von Ahn and Gerald E. McCormick)

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