Petrobras May Issue More Debt

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Less than a year removed from a $70 billion share sale that was the largest equity offering ever, Petrobras, Brazil's state-run oil producer, may need to sell debt this year. The comments were made by Petrobras CEO Sergio Gabrielli in an interview with Bloomberg News.

Petrobras (PBR) is in the midst of revising its five-year $224 billion exploration budget, which the company unveiled last year. By far the largest spending plan of any of the world's oil majors, Petrobras did say last week there is a possibility the budget will be pared.

Petrobras is considering its financing options as it reviews 680 investment projects, Gabrielli said in the Bloomberg interview. The company sold $6 billion in dollar-denominated debt in January.

Last year's share sale and the continued need for financing have hampered shares of Petrobras. Even while oil prices have surged, shares of Petrobras have languished compared to performances turned in by U.S. and European rivals. In the past year, Petrobras has traded flat as some of its rivals have surged 40% or more.