NEW YORK (TheStreet) -- Shares of Petroleo Brasileiro Petrobras (PBR.A) are rallying, up 4.05% to $6.93 in late morning trading on Tuesday, as the Brazil-run oil and gas company is reducing its refining and exploration spending amid slumping oil prices, Bloomberg reports.
The biggest oil producer in ultra-deep waters is cutting spending as oil prices collapse. It's becoming increasingly difficult for the company to tap debt markets amid its ongoing corruption scandal, according to Bloomberg.
Petrobras plans to freeze its investments in the Premium I and Premium II refineries in northeastern Brazil, and will sell assets to protect its cash position, Bloomberg added.
Last Friday, charges were announced against 36 suspects in Brazil's corruption scandal in which companies allegedly bribed public officials and overcharged the state-run energy company.
Former director of Petrobras' refining division, Paulo Roberto Costa, was charged along with 23 executives from major Brazilian construction companies.
Alberto Youssef, who allegedly deals currency on the black market and distributed the bribe payments, was also charged, according to Market Watch.
Petrobras is a Brazil-based integrated oil and gas company, operating through seven segments.
Separately, TheStreet Ratings team rates PETROBRAS-PETROLEO BRASILIER as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PETROBRAS-PETROLEO BRASILIER (PBR.A) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."