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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Oil giant of Brazil, Petrobras, announced on Monday its net loss for 2015 was R$34.8 billion, the largest in the company’s history. According to officials, the losses were due to the decline in oil prices around the world, the depreciation of the Brazilian currency and payment of interest rates.

Brazil, Rio de Janeiro, Petrobras
Petrobras executives announce 2015 final results on Monday, photo by Cristina Indio do Brasil/Agencia Brasil.

Petrobras’ CEO, Aldemir Bendine, said that 2015 was a very difficult year for oil companies around the world and despite the Brazilian company’s registered losses Petrobras did register a positive cash flow.

“Despite a negative accounting result, we did register a positive administrative result with the company, after eight years, generating a positive cash flow,” said Bendine during the presentation of the results. “Administrative expenditures retreated and we registered a decline in our net debt,” added the executive.

Analysts say Petrobras’ negative results were determined by an extremely weak second half of the year due to the deteriorating Brazilian economy. During the first two quarters of 2015 the company registered profits, of R$5.3 billion and R$500 million, respectively.

The negative results started to appear during the third quarter, when the company registered a loss of R$3.8 billion. In the fourth quarter, with the the country losing its investment grade and the U.S. dollar surging in relation to the Brazilian real, Petrobras’ net loss surged to R$36.938 billion.

During the Monday presentation, however Petrobras executives noted that operational losses in 2015 were of R$12.4 billion, 42 percent lower than during the previous year. They also noted that last year the company surpassed its annual petroleum production target for the first time in thirteen years, producing a volume of 2.128 million barrels per day.

Brazilian federal police agents gather material for Lava Jato scandal,
Brazilian federal police agents gather material for Lava Jato scandal, photo courtesy of Agencia Brasil.

Company officials noted that annual average production in the pre-salt layer was the largest in history, surpassing 2014 production by 56 percent. Exports, they said increased by 55 percent in relation to 2014.

Nonetheless, Petrobras executives announced that due to the losses there would be no distribution of dividends to shareholders this year or profit sharing payments for employees. Although Bendine says that employees met their operational targets last year the priority at the moment is the recovery of the company.

The cut in gratuities is in line with the company’s plan to drastically cut investments and administrative expenditures, seeking greater operational efficiency to counter balance the increasing negative scenario. In December officials announced the company was reducing by 25 percent, or US$32 billion, its investments until 2019. The total amount the company expects to invest during this five-year period is US$98.4 billion.

Petrobras is also seeking to get back more of the money diverted from the company to the mega-corruption Lava Jato (Carwash) scheme. According to Bendine approximately US$300 million have been returned to the company so far but he expects this volume to increase.

“There are several (legal) actions in place with asset values which have not yet been legally approved.” According to the Federal Prosecutors’ Office, officials have already been able to retrieve R$2.9 billion from the corruption scheme.

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