KNOWING the worst can help with a recovery. But it is no guarantee. Petrobras issued its much-delayed results on April 22nd, after accountants had scoured its books to find details of many years of scams and kickbacks, which are part of Brazil’s biggest corruption scandal. The state-controlled oil company said that graft had cost it 6.2 billion reais ($2.1 billion). Other charges included a bigger-than-expected write-down of 44.6 billion reais, mainly on a flagship petrochemical complex and a big refinery. The net loss was 21.6 billion reais in 2014, against a 23.6 billion reais profit the year before.
Cleaning up Petrobras (and Brazil’s political system) is a long-term job. In the short term the company is focused on survival, with production sinking, oil prices low, cash scarce, and a hefty bill looming to develop its prized assets: the “pre-salt” oilfields that lie deep below the country’s offshore waters.
Publishing audited results was vital. Creditors could have demanded early repayment of $54 billion of debt if the company had missed a deadline of April 30th. The previous management’s borrowing binge left...
from The Economist: Business http://ift.tt/1Oh8DBT
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