Brazil’s Petrobras is reportedly preparing to slash its five-year investment plan by about 20 percent as it reels from a widening corruption scandal and a massive debt load.
Sources with knowledge of the cost cutting plan told Reuters that the state-owned company is considering lowering its capital spend for the 2016 to 2020 period by about $80 billion, or by an average of about $16 billion a year.
The sources added that the plan has not been finalized yet.
If Petrobras goes through with the cuts, its five-year spending plan would shrink to its smallest size since 2006, Reuters added.
Petrobras has not commented on the matter.
In January, Petrobras adjusted its 2015 to 2019 spending plan down to $98.4 billion, a $32 billion reduction from its previous $130.3 billion budget.
Petrobras also said that month that it will cut its management headcount in non-operational areas by at least 30 percent as part of a cost cutting effort expected to save the company $460 million per year.
Petrobras, currently the most indebted oil firm in the world, has also been dealing with falling reserve levels.
Last month, the company said its proven reserves fell by just over 3 billion barrels in 2015 to 13.279 billion barrels of oil equivalent (boe) according to ANP/SPE, down from 16.612 billion boe the previous year.
According to Reuters, the reserve decline marks the company’s lowest reserve level since 2001.
Petrobras has been dealing with the fall out of a kickback scandal that has landed several executives in jail and prompted class action lawsuits.
The scandal has also ensnared several high level Brazilian politicians including lower house speaker Eduardo Cunha and senator Fernando Collor de Mello.
U.S. District Judge Jed Rakoff of Manhattan ruled last month that Petrobras must face class action lawsuits filed by investors looking to recover losses tied to the company’s ongoing corruption scandal.