Brazil’s state-run oil producer, Petróleo Brasileiro SA (Petrobras), has slashed its production targets by 1.8% to 2.1mb/d and capital spending budget by 24.5% to $98.4m in the period between 2015-2019, Industry Week reported. The company has also cut its investment package to $20b in 2016, down from $27b proposed in June. The budget cuts came for the third time in over only six months in order to preserve company’s cash for debt payments of up to $130m and are likely to threaten company’s future output, wrote Reuters.
Ratings agency Moody’s downgraded Petrobras last month for the third time in a year and has warned with further credit deduction in the upcoming months. This comes at the time of Brazil’s worse recession in the last 25 years.