Petrobras cuts spending on interest and debt charges

The expenditures of Petrobras with interest and charges stemming from the financial debt saw a decline in the third quarter of 2021. The amount reached $669 million, 31.1 percent below the $971 million spent in the same period in 2020.

According to the company, comparing the first nine months of 2021 with the same span in the year prior, the reduction was also significant. The total went from $2.8 billion to approximately $2.3 billion, down 17.9 percent.

Rodrigo Araújo, director for Finance and Relationship with Investors, argues that the slash in spending on debt services is yet another demonstration that balance financial is being recovered by Petrobras. These interests and fees, he pointed out, stem from loans taken by the company—amounts that were returned to creditors.

“Now, a portion of these funds are available for allocation in profitable projects that generate value for the company or shareholders—the Brazilian society being the biggest beneficiary, with approximately 37 percent of returned values, which add up to the nearly [$32.8 billion] in taxes that we expect to pay in 2021,” he declared.

According to Petrobras, the reduction in expenses is yet anther result of the sharp decline in the company’s total debt. In 2014, expenditures reached $1.7 billion a quarter, in financing costs alone, and the total value of the debt surpassed $130 billion—“or over $160 billion, if you take into account the chartering of oil platforms and other assets that started being regarded as debt as of 2019 with the adoption of IFRS 16 [international accounting norms].”

The debt seemed to many to be impossible to be paid, the company noted. “Petrobras, however, set as a target to be met by the end of 2022 the reduction of its total gross debt—financing and chartering—down to $60 billion, a sum viewed as healthy for a company like Petrobras.”