RIO DE JANEIRO—Brazilian state-run oil company Petróleo Brasileiro SA approved the sale of up to 3 billion reais ($1 billion) in debentures on the local debt market in 2015, the company said in a filing late Friday.

Petrobras has no specific timeline for the transaction, which will depend on market conditions.

Chief Financial Officer Ivan Monteiro said in a news conference on Friday that Petrobras may consider issuing debt whenever it believes the interest rates would fall in line with its current benchmark bond yield.

Petrobras has tapped U.S. and European debt markets for tens of billions of dollars in financing in recent years, paying yield-starved investors there interest rates that often fell below 5%. Rates tend to be significantly higher in the Brazilian market, however, where the current interbank lending rate stands at 13.13%.

Petrobras' free cash flow remains deeply negative as it continues to invest heavily to develop ultra-deep water oil reserves off the coast of Brazil.

On Friday, the company said interest and amortizations on existing debt are expected to cost $21 billion this year, and capital expenditures are forecast at $29 billion. The company's operations, on the other hand, are only seen generating $25 billion in cash during 2015.

But with the biggest debt load of any major oil company, investors' willingness to lend more money to Petrobras at affordable interest rates remains to be seen. A corruption investigation by federal prosecutors alleging a massive bribery and kickback scheme around the company further damaged its credibility.

Petrobras wrote off more than $2 billion in 2014 related to the corruption allegations. The company considers itself a victim of the scheme and has begun filing a series of lawsuits against contractors that allegedly profited from it.

Write to Paul Kiernan at paul.kiernan@wsj.com

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