Yes, the ‘crash’ of oil prices in recent months ($115/barrel to below $70) has helped Petrobras slightly (since it sells gasoline locally at a loss).
But Petrobras’s hole is deeper. And it’s because of its debt.
As Petrobras holds the title of one of the most indebted companies in the world, it also faces the issue of a depreciating currency (Real).
Consider this: 80% of Petrobras’ debt of BR$240 Billion is denominated in US dollar or Euro. Only in the second quarter of this year, Petrobras paid BR$7.8 billion to service its debt. This year, the company will spend over BR$35 billion just to service its debt. With the depreciating currency, this bill should go up.
“The company is so leveraged and with such a high need for investment, that an abrupt change in exchange rates can be fatal to its ability to service its debt in 2015,” said Adriano Pires, an energy consultant.
“Either Petrobras increases gasoline prices, or cut investments, or take on more debt in the market, but the “Lava Jato” scandal makes it all harder,” says a manager.
Source: Veja (Geraldo Samor)