Petrobras cuts payroll, woos China

OREANDA-NEWS. September 05, 2016. Brazil's state-controlled Petrobras is cutting its payroll in a broad restructuring and downsizing effort.

The company says 11,704 employees signed up for voluntary termination that will save around R33bn (\\$10.2bn) by 2020.

First announced in April, the program is aimed at attracting around a fifth of the company's 57,000 employees.

Petrobras says the program will cost it R4bn, and 2,450 employees have already been terminated.

The restructuring plan features \\$15.1bn in non-core divestitures through the end of this year. Asset sales have gained momentum under recently appointed chief executive Pedro Parente, who says the company will meet its goal despite a sluggish start.

The heavily indebted company has increased borrowing this year to keep its investment-intensive upstream plans on track.

At a ceremony in Shanghai today, President Michel Temer, who assumed office on 31 August after Dilma Rousseff was impeached, signed a \\$1bn investment agreement between Petrobras and China's Eximbank.

The conclusion of the deal, first announced in May, bolsters a \\$17.5bn capital spending plan for 2016, down from an original \\$27bn.

Petrobras is negotiating with Chinese banks for a \\$10bn oil export-backed loan that should be finalized this year.