Embattled Brazilian oil giant Petrobras slashed its capital spending budget for the next two years on Monday, the second time the company has curbed its spending plans in three months.
According to Reuters, Petrobras plans to cut its 2015 investment budget down to $25 billion from its previous $28 billion target.
The state owned company will also slash its 2016 budget to $19 billion from $27 billion, a 30 percent cut.
The cuts should come as no surprise considering the company’s 2015 to 2019 financial plan released in August assumed Brent crude prices would average $60 per barrel this year and $70 per barrel next year, the Wall Street Journal noted.
Brent was trading at about $51.70 per barrel around noon on Wednesday.
Petrobras confirmed that it’s sticking to its plan to sell up to $15.1 billion worth of assets by the end of 2016, with about $700 million of divestments expected this year, Reuters added.
Already the most indebted oil company in the world, Petrobras has been hard hit by low oil prices, Brazilian currency weakness and an ongoing corruption scandal that has ensnared several high level politicians and forced former CEO Maria das Gracas Silva Foster to resign earlier this year.
Brazilian prosecutors charged lower congressional house speaker Eduardo Cunha with corruption in August for allegedly taking bribes tied to Petrobras deals.
Jose Dirceu, a top aide to former Brazilian president Lula da Silva, was arrested that month for allegedly spearheading the creation of a bribery and corruption scheme tied to Petrobras contracts.
Former Brazilian president Luiz Inacio Lula da Silva is also being investigated for allegedly using his influence to help Brazilian construction firm Odebrecht win overseas business.
The Bill and Melinda Gates Foundation Trust filed a lawsuit last week against Petrobras and its auditor, alleging that the graft scandal caused the trust to lose millions of dollars.
Petrobras said in April that the graft scandal could be worth as much as $2 billion.
The company booked a $7.15 billion loss for 2014 primarily due to a $14.76 billion impairment charge and a $2.05 billion write down for “improperly capitalized additional spending” related to the corruption probe.
Ratings agency Standard & Poor’s downgraded Petrobras bonds to a junk rating in September, months after Moody’s downgraded the company’s bonds to junk and kept its negative outlook as a result of the scandal.
“Petrobras reiterates that the medium-term fundability of its projects has been assured through loans taken out this year from financial institutions in Brazil and other countries,” the company said in response to the downgrade.