Shares of Petroleo Brasileiro SA fell in trading Wednesday in Sao Paulo because of concerns the company won’t be able to fund a slimmed-down business plan announced this week.
Petrobras — the most indebted oil company in the world, according to Bloomberg — is saddled with continuing government-ordered fuel subsidies.
Preferred shares of the company were down 3.5 percent Wednesday to 13.68 reais, the lowest in more than three weeks, Bloomberg said.
The business plan released this week called for a $16 billion cut in funding for new investments through 2018.
Petrobas’ refining division has lost about $37 billion since 2011.
Some analysts think even the new business plan with less investment might not be attainable because of the subsidies and Petrobras’ huge debt load.
“Petrobras has been selling imported gasoline and diesel below cost to help the government fight inflation, causing profit to decline at a time when the company is planning $220.6 billion of investments to develop new oil discoveries,” Bloomberg said.
The company now has $114.3 billion in debt, making it the most indebted oil company in the world, according to data compiled by Bloomberg.
Petrobras said it doesn’t expect to generate positive cash flow until 2016.