Exclusive: Petrobras drags heels on Brazil fuel-price policy - sources

Mon Aug 3, 2015 5:28pm EDT
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By Jeb Blount and Marta Nogueira

RIO DE JANEIRO (Reuters) - Brazil's state-run oil company, Petrobras, has failed to present its board of directors with a promised plan to bring domestic fuel prices in line with world levels, three sources with direct knowledge of the situation told Reuters.

The lack of a policy threatens the company's already-fragile finances and could delay efforts to sell refineries and other assets, said the sources, who asked for anonymity because they are not authorized to talk to the media.

Petroleo Brasileiro SA, as Petrobras is formally known, has promised to sell $15.1 billion of assets by the end of 2016 and reduce its $120 billion debt, the largest of any oil company.

"Who in their right mind would buy a refinery or a stake in a Petrobras refinery if there is no clear formula under which they will be allowed sell their product?" one of the sources said. "How will investors take the company seriously when it keeps promising a policy and then never provides one?"

Brazil's government, which owns a majority of Petrobras common stock and appoints a majority of the board, has long blocked domestic fuel price increases in an effort to control inflation, which at 8.9 percent in July was nearly double the government's target.

Petrobras officials were not immediately available to comment on Monday.

Among the refinery assets Petrobras seeks to sell is a stake in the Comperj Refinery outside Rio de Janeiro.

Petrobras wants a partner to help complete the $15 billion refinery. While unfinished, Comperj is already one of the most expensive refineries ever built and a focus in a massive bribery probe.   Continued...

A fuel storage tank is seen at the company Petroleo Brasileiro SA, or Petrobras, in Sao Caetano do Sul, near Sao Paulo July 24, 2015. REUTERS/Nacho Doce