Petrobras, Brazil’s national oil company, Wednesday reported a 2014 loss of $2.1 billion, mainly due to an asset impairment charge and a write-down totaling about $5 billion arising from improper payments identified in an anti-corruption investigation by the Brazil Federal Police.

“Today is an important day, not only for us but for the whole company,” Petrobras chief executive Aldemir Bendine reporters, according to Bloomberg. “We are cleaning up mistakes.”

In February, Bendine replaced Maria das Gracas Foster, who was forced to resign amid a lack of consensus within the company over the size of the writedowns.

A Petrobras land oil pump

A Petrobras land oil pump

Bendine is not only seeking to contain damage from a decade-long scandal that involved alleged kickbacks, bribes, and inflated construction contracts, he is also grappling with the lowest oil prices in six years and cost overruns that contributed to the record 2014 losses, Bloomberg wrote. The company chose to preserve cash by not paying dividends and reducing its 2016 investment budget by 37%, to $25 billion.

“After years of over promising and under delivering, they are finally setting expectations low enough that they can beat them,” James Gulbrandsen, chief investment officer of the Brazil division of NCH Capital, reportedly emailed to Bloomberg. “That’s a good thing.”

The scandal, dubbed “Carwash,” has also wreaked havoc on Brazil’s bond market, with no Brazilian companies selling debt overseas since Nov. 14, Bloomberg wrote.

Photo: Allan Patrick, CC BY-SA 3.0

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