December 21, 2018 / 11:37 AM / 3 months ago

Brazil's Petrobras suspends new oil exploration or production divestments

SAO PAULO, Dec 21 (Reuters) - Brazil's state-controlled Petroleo Brasileiro SA will suspend any new divestment initiatives in oil exploration or production, the company said on Thursday, following a Supreme Court decision.

The decision suspended an agreement between Petrobras, as the company is known, and the Brazilian government that helped shield the company from liability as it seeks to dispose of some $27 billion in assets in order to raise cash to pay its debts. The agreement also imposed transparency rules.

The divestment program is seen as crucial to the company's growth in the future, and Petrobras said in a statement that divestment initiatives started before May of this year should not be affected.

"Petrobras is studying new ways to continue with its divestment program, in accordance with current legislation while following the limits set by this decision," the company said in a statement.

Petrobras' decision to cancel new divestment programs could also affect some of the companies that operate together with it in different consortia, such as Royal Dutch Shell Plc, Exxon Mobil Corp and Norway's Equinor ASA. (Reporting by Luciano Costa; editing by David Evans)

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