BRASÍLIA--Brazil's state oil company Petróleo Brasileiro SA will
have to carry a heavy debt load for the time being and strengthen
governance to mitigate corruption risks, Chief Executive Aldemir
Bendine said on Tuesday.
Mr. Bendine said that Petrobras' asset-sale plan isn't enough to
reduce its debt to a desirable level. As of Dec. 31, Petrobras' net
debt was 282,1 billion Brazilian reais ($96.6 billion), up 27% from
a year earlier and equal to 4.7 times earnings before interest,
taxes, depreciation and amortization.
Mr. Bendine was speaking at the Senate's economic affairs
committee, in a session expected to last for several hours as
lawmakers ask questions about the company's troubled finances and
its connection to a corruption scandal.
Petrobras released last week its first audited financial
statements in more than eight months, as the company struggled to
put a figure on its losses related to the corruption scandal.
Brazilian federal prosecutors since last year have been
investigating allegations that the company's suppliers conspired to
overcharge Petrobras for major projects, funneling some of the
illicit profit to former Petrobras executives and politicians in
the form of bribes and illegal political donations.
Petrobras, which has portrayed itself as a victim of the graft,
says it has cooperated with authorities.
Last week, Petrobras reported around $17 billion in charges
related to the alleged graft and to assets that were overvalued on
its balance sheet.
Mr. Bendine, who took the helm in February, said that the
investigations are limiting the number of suppliers Petrobras can
have business with.
He also said that regulation mandating Petrobras to hold at
least 30% of presalt oil projects, where reserves are located below
the seafloor, means that any new well would stress the company's
finances. But the company doesn't "need to invest in new wells
right now," he said.
Write to Luciana Magalhaes at Luciana.Magalhaes@dowjones.com and
Paulo Trevisani at paulo.trevisani@wsj.com
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