MOSCOW (MRC) -- Pedro Parente, the new CEO of Brazil's state-owned oil company Petrobras, has kicked off his first day by vowing change as he attacked the way the company has been run, noting corruption, heavy debt and government control of fuel prices, reported Reuters.
He said Petrobras must cut its nearly USD130B of debt on its own.
"Some say to get out of this grave situation the federal government must capitalize the company. I don't like this because it tosses the problem on the back of the taxpayer," Parente said
A bailout would also dilute existing shareholders and weaken the credit of the government, he said.
In a forceful and wide-ranging address to employees, Parente promised independence from political interference, calling the company's recent history of soaring debt and rampant corruption "absurd."
Parente, 63, a former Petrobras chairman and CEO of the Brazil unit of commodities trading giant Bunge Ltd, was appointed CEO of Petrobras last month by Brazil's interim president, Michel Temer.
Petrobras accumulated billions of dollars in refining unit losses in recent years, causing debt to balloon, because the government, in an effort to control inflation, refused to let it raise gasoline, diesel and propane prices when world prices were high.
Parente urged Congress to pass bills ending Petrobras' legal obligation to operate all oil exploration and production in the Subsalt Polygon, an offshore district near Rio de Janeiro where giant oil discoveries have been made in the last decade.
The law, he said, hurts the government and Petrobras by either forcing the company to finance investment it cannot pay for or prompting the government to forgo oil development because Petrobras cannot afford it.
Paying down debt and ramping up output will be the top priorities, Parente said, adding that the sale on non-core assets will be key to debt cuts. He said he has not been in the company long enough to say what assets will be on the block.
He said the company will prepare a strategic plan to meet his goals within 120 days.
As MRC wrote previously, Brazil's state-controlled oil producer Petrobras is seeking to sell its 5.8 billion Brazilian real (USD1.4 billion) stake in petrochemical producer Braskem SA. Petroleo Brasileiro SA (Petrobras) has hired Brazilian bank Banco Bradesco SA as a financial adviser and has started to pitch the sale to foreign investors. Petrobras owns a 36 percent stake in Braskem, Latin America's largest petrochemical producer. The sale would help Petrobras meet its target of selling USD15.1 billion worth of assets in 2015-16, a key part of its plan to cut debt as oil prices plunge to 12-year lows.
Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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