Petrobras, the scandal-plagued Brazilian oil giant, plans to sell off more assets next year to offset rising debt that has soared to five times the company's value, its president Aldemir Bendine said Tuesday.
"Our biggest challenge is to reconfigure the company's debt," he said at a year-end news conference.
The state oil company's debt has shot up more than 40 percent this year in tandem with a sharp decline in the value of the Brazilian real against the dollar.
It now totals about 500 billion reals, or about $130 billion, while the company's market value hovers around 110 billion reals ($28.4 billion).
Bendine said Petrobras has managed to reduce its debt in dollars by five percent this year, but to cut it further "there is no other way but divestment," which he said "will undoubtedly be broadened" in 2016.
The company's plans call for the sale of $15.1 billion in non-essential assets by the end of 2016, but it has so far refrained from putting on the block its crown jewels -- the deepwater offshore oilfields found in what is called the pre-salt layer below the seabed.
The ballooning debt has come in a terrible year for Petrobras, battered by plummeting crude prices and a mega pay-to-play corruption scandal that has tarnished its once shiny image.
Moody's last week downgraded its debt rating for the third time this year to junk status, Ba3, leaving open the possibility of another downgrade.
It cited "worsening governability conditions and increased risk of policy paralysis."
Bendine said Petrobras has sufficient reserves to weather the market's ups and downs, and that its financial condition will strengthen in 2016.
But the company, which produces 2.1 million barrels of oil a day, faces huge, looming debt payments: more than 50 billion reals in 2016, 45 billion in 2017, more than 60 billion in 2018 and 90 billion in 2019.
The company had planned to invest $45 billion in 2015, but its capital spending has been cut back three times this year to $23 billion.
The company's 2015 earnings will not be released until February, but a company source said it was expected to be in the red.