RIO DE JANEIRO: Brazil's state-led oil giant Petrobras posted its first quarterly loss in more than 13 years, fanning concerns that the company, hampered by government intervention and soaring costs, will fail to meet its goal of becoming one of the three biggest crude producers by the end of the decade.
Petrobras lost 1.35 billion reais ($665 million) in the second quarter, compared with net income of 10.9bn reais a year earlier, according to a securities filing.
Chief executive Maria das Graas Foster, who was appointed in January after nine years of missed production targets, blamed the loss on a weaker Brazilian currency, which boosted debt costs, and the write-off of losses related to recently drilled wells that came up dry or failed to show commercially viable resources.
Petrobras earnings were also hampered by rising capital spending, falling oil and gas output and the long refusal of the federal government, the company's controlling shareholder, to let the company raise fuel prices in line with increases in market prices for crude.
Brazil's real was an average 18 per cent weaker in the second quarter than it was a year earlier. Brent crude oil, a benchmark for world prices, was 7pc lower. Output, despite soaring spending, fell 1.1pc.
The company's massive investment programme, which calls for average spending of about $130m a day for five years, is designed to more than double output to about 5.4m barrels a day by 2020.
If achieved, Petrobras would become one of the world's three largest producers. By contrast, if other producers such as Shell, BP and OGX are included, Brazil could produce about 7m barrels a day, threatening the US for the role of world's No 3 producer.