Petroleo Brasileiro SA is looking to fight back the junk debt ratings that have made its borrowing costs balloon.
The oil industry’s most indebted major producer is studying ways to borrow against future crude exports as part of an effort to cut its dependency on international capital markets, Chief Financial Officer Ivan Monteiro said during a conference call Friday. This month it’s also completing deals to sell two massive production tankers that cost it more than $1 billion, only to lease them back from the buyers, he said.
“We don’t want to sanction the high yields offered by the market,” Monteiro told reporters in Rio de Janeiro on Thursday. “There are a number of alternatives on the table.”
The hunt for cash comes as Petrobras, the world’s biggest producer in deep waters, grapples with the collapse in crude prices, a devaluation of the local currency that inflates foreign-debt costs and a sprawling graft scandal that has led some of its suppliers to seek bankruptcy protection. The Brazilian state-controlled producer is also accelerating efforts to sell assets and meet investors and potential strategic partners.
Monteiro estimates that $25 billion is available for the company in capital markets but stressed the producer won’t necessarily tap it all. Arrangements that can be analyzed individually by potential investors and disconnected from the ratings from credit agencies are among the company’s funding goals, Monteiro said.
Petrobras has used future exports in exchange for loans in the past.
A $10 billion arrangement with China in 2009 included a commitment to export as many as 150,000 barrels a day of oil in the first year and 200,000 barrels a day over the subsequent nine years.
Management will go on a road trip to talk to potential investors next week in countries including the U.S., China, Mexico and the U.K.