Brazil's state-run oil company Petrobras said that it would borrow $20 billion in 2013, 63 percent above its planned five-year average, as stagnant revenue and fuel subsidies increase the need for debt to finance investment.
The borrowing will come from local and international sources and include bank loans and bonds, a company press spokeswoman said, citing Almir Barbassa, chief financial officer at Petroleo Brasileiro SA, as Petrobras is formally known.
In the company's $237 billion 2013-2017 strategic plan, announced last month, Barbassa said the company planned to borrow an average of $12.3 billion for each of the five years of the plan.
While Barbassa's 2013 debt target is 20 percent below 2012 borrowing of about $25 billion, the continued above average level shows the difficulties Petrobras faces trying to meet conflicting goals of the government, its main shareholder.
Borrowing last year was 56 percent above the $16 billion annual average in the previous five year plan for 2012-2016.
Revenue at Petrobras is being reduced on several fronts. Petrobras production in Brazil has fallen for 11 straight months while at the same time the government has refused to let Petrobras raise gasoline and diesel prices in line with world prices.
Those factors, combined with rising domestic fuel demand and limited refining capacity, have further crimped cash flow. This forces Petrobras to borrow more to meet its ambitions expansion plans and speed up delayed efforts to develop giant new offshore oil and natural gas reserves.
A plan to ease the cash crunch by selling oilfields, refineries, and other assets in Brazil and abroad has also faltered, with Petrobras cutting its expected return from such sales to $9.9 billion from $15 billion.
In 2012 the Rio de Janeiro-based company's debt levels surpassed its own internal limit of 2.5 times cash flow as measured by earnings before interest, taxes depreciation and amortization, or EBITDA.
In December Petrobras' investment-grade debt rating was put on watch for a possible downgrade, and in the second quarter of 2012, the company posted its first loss in 13 years.
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