Brazil Isn’t Ruling Out Petrobras Bailout
State-controlled oil company has been mired in financial troubles amid a decline in oil prices
BRASÍLIA—Brazilian President Dilma Rousseff said Friday that a government bailout for the country’s troubled state-controlled oil company can’t be ruled out.
Petróleo Brasileiro SA, or Petrobras, is mired in financial troubles amid a deep decline of global oil prices and a sprawling corruption scandal involving several of its former executives and its largest suppliers.
The government, meanwhile, is struggling with a widening budget gap, a 4% economic contraction and double-digit inflation, severely restricting its capacity to use taxpayer money to help Petrobras.
However, the government isn’t ruling out “evaluating” a bailout if oil prices remain weak, Ms. Rousseff said to reporters at the presidential palace, according to recordings made available by the administration.
A Petrobras spokeswoman didn’t immediately have a comment.
The company had a debt of more than 506 billion Brazilian reais ($124.9 billion) at the end of the third quarter. Petrobras might need help from Brazil’s Treasury if it fails to sell by the end of this year the $15 billion in assets it has targeted, a difficult goal given low oil prices and other factors.
Petrobras shares were down more than 8% in afternoon trading in New York amid a continuing slump in oil prices.