Petrobras to cut US$35 billion of investment budget

The board of Brazil’s state-owned oil and gas company Petrobras announced cuts in its investment budget of as much as US$35 billion through 2015. The cuts in the investment budget will affect projects in petroleum refining and exploration and production.  In addition, government representatives informed Petrobras to keep the prices of gasoline and diesel fuel stable.  Gasoline and diesel fuel sales make up 60% of the company’s income.   Analysts believe that the cuts will not affect development of pre-salt reserves, the biofuels project and diesel fuel improvement projects.  Jose Lima de Andrade Neto, a senior executive at Petrobras, said that ethanol and gasoline prices in Brazil will continue to fall, as Brazil’s government mandates that one-quarter of gasoline sold at the pump be ethanol. (May 18, 2011, May 19, 2011)