Sabrina Valle and Juan Pablo Spinetto Rio de Janeiro
A GRAFT scandal cost Petrobras 6.2 billion reais (R24.8bn) after a five-month internal debate that shut off access to bond markets, cost the chief executive her job and destabilised the country’s politics, Brazil’s national oil company said.
By disclosing the charge in its first audited results since August, Petrobras opens the way for renewed access to financial markets. Shares of the world’s most-indebted oil company rose in New York even after it reported a net loss of 21.6bn reais for 2014.
“However, the market interprets the number, actually arriving at a number creates more credibility,” Rafael Cortez, a political analyst at Tendencias Consultoria, said in São Paulo.
As chief executive Aldemir Bendine seeks to contain damage from the scandal – a decade of alleged kickbacks, bribes and inflated construction contracts – he’s also grappling with the lowest oil prices in six years and cost overruns that contributed to a 44.6bn reais impairment in 2014.
The company opted not to pay dividends to preserve cash and reduced its 2016 investment budget by 37 percent to $25bn.
Petrobras’s Frankfurt-listed shares rose as much as 2.76 percent in trade yesterday, and fell as much as 9.93 percent.
“Today (yesterday) is an important day, not only for us but for the whole company,” Bendine said on Wednesday in Rio de Janeiro. “We are cleaning up mistakes.”
The so-called Carwash scandal has made it more difficult for Brazilian President Dilma Rousseff, a former chairman of Petrobras, to enact economic reforms as her popularity falls to record lows.
The investigation has also cast a shadow over the nation’s bond market, with no Brazilian companies selling debt overseas since November 14.
“One of the darkest clouds hanging over Brazil is being lifted,” Nicholas Spiro, the managing director at Spiro Sovereign Strategy in London, said. “Yet while the company may avert a technical default, the fallout from the scandal has yet to run its course. More importantly, the political damage from the affair is huge.”
A lack of consensus within the company over the size of the writedowns prompted chief executive Maria das Graças Foster to resign. She was replaced on February 6 by Bendine, the former chief executive of state-run Banco do Brasil.
While Petrobras, known formally as Petroleo Brasileiro, still had “giant” challenges ahead, the reported losses were in line with analyst estimates, Adriano Pires, the head of Rio-based consultancy CBIE, said. – Bloomberg