Wed | Jan 16, 2019

Petrobras overhauls corporate structure

Published:Friday | January 29, 2016 | 12:00 AM

Brazil's state-run oil company Petrobras said Thursday it will slash management jobs as part of an efficiency drive approved by its board of directors.

The plan calls for a 30 per cent reduction of management jobs in non-operating areas. The company has about 7,500 approved management positions, of which 5,300 are in non-operating areas.

Petrobras said the reforms are a response to the lower gas and oil prices and mark a shift to more profitable activities. It hopes the restructuring will trim about 1.8 billion reals - now US$440 million - from its annual costs.

Offshore pre-salt projects remain a core activity for the company, it said in comments emailed to The Associated Press. It said the pre-salt fields have "a fantastic magnitude" and are "its most valuable assets".

The measures come as the company struggles with a corruption scandal in which managers and politicians face investigations of alleged bribery.

In view of that, Petrobras also said the overhaul will target procurement processes, which now will necessarily involve three areas of the company in a bid for economies of scale and spreading responsibility. Previously, procurement was decentralised.

Under Petrobras' adjusted investment plan, the company will invest US$98.4 billion through 2019, mainly on exploration and production. The company said it will also attempt to improve its financial profile through an aggressive drive to reduce debt.

Meanwhile, former Brazilian President Luiz In·cio Lula da Silva is angry over a prosecutor saying a luxury apartment that he once thought of buying could be part of a scheme to launder money from the corruption scandal buffeting state-owned oil company Petrobras.

The Sao Paulo-based Lula Institute says on its website that Silva repudiates any attempt to involve his name in illicit acts. Silva has said his wife had an option to buy the apartment in the coastal city of Guaruja but they never purchased it.

On Wednesday, prosecutors said they were investigating whether money diverted from the Petrobras scheme was laundered through illegal real estate transactions.

Prosecutors have alleged that over US$2 billion was paid in bribes by businessmen to obtain Petrobras contracts.

- AP