Petrobras draws more loans

Petrobras draws more loans

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Brazil's state-owned oil company Petrobras said on Thursday that it plans to receive BRL3.5 billion ($697 million) from two new credit lines, following a withdrawal for $8 billion earlier this week.

Petrobras also said it will cut investments this year to $8.5 billion from $12 billion by postponing exploratory activities and delaying the construction of production and refining facilities. The company will cut production by 100,000 barrels per day by the end of March in reply to a sharp drop in global demand after the coronavirus outbreak, it said in a statement.

Petrobras has planned sweeping cost-saving measures to help balance its books this year. Staff cost reductions are expected to save around BRL2.4 billion through measures that include the postponement of bonus, vacation and overtime payments, the suspension of promotions and a freeze on new hires for three months.

Speeding up the reduction of operating expenses will save another BRL2 billion by mothballing platforms in shallow water oil fields, which have a higher lifting cost per barrel, and postponing new material contracts for a period of 90 days.

"The current oil production of these fields is 23,000 barrels per day and the divestments in these assets are still in progress," Petrobras said.

Petrobras also announced several measures to help prevent the spread of COVID-19 within the company and in Brazil, including the donation of 600,000 coronavirus tests due to arrive in April and the creation of a multidisciplinary group to work with universities, companies and institutions.