RIO DE JANEIRO: Brazil’s state oil giant Petrobras on Monday slashed its five-year investment plan by 37 per cent as part of efforts to recover from a massive corruption scandal.

The cuts to the 2015-19 plan will reduce Petrobras’s investment spending over the period to $130.3 billion dollars, the company said.

“Investments have been reduced by 37pc compared to the preceding plan,” it said in a statement.

Petrobras has been reeling from a kickback and political payoffs scandal that has cost the company more than $2bn in 2014.

Prosecutors say Petrobras executives colluded with construction companies to massively overbill the oil giant for projects and use part of the money to bribe politicians and parties, including the ruling Workers’ Party.

Most investment — 86pc — through 2019 will go toward exploration and production of oil.

The company, mired in debt, plans business restructuring and assets sales to the tune of 42.6bn dollars in 2017-18. This year and next, it foresees divestment of 15.1bn dollars.

The scandal has already seen eight former company executives jailed. A former treasurer of the ruling Workers’ Party is also in prison. Several dozen lawmakers are under investigation.

The scandal has also pushed the company’s share price down and forced a complete change in senior management.

Published in Dawn, June 30th, 2015

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