SAO PAULO, July 14 (Reuters) - Standard & Poor's reiterated a negative outlook for Brazil's Petrobras on Tuesday, signaling the state-run oil company might soon lose its investment-grade rating despite its recent efforts to cut debt and restore investor confidence.
Petroleo Brasileiro SA, as the company is formally known, has slashed its long-term spending plan to an eight-year low as it grapples with the financial impact of a massive corruption scandal.
Petrobras holds approximately $120 billion in debt, more than any other oil company and enough to make it one of the most indebted industrial companies in the world.
S&P said Petrobras' updated business plan focused on debt reduction rather than on increasing production.
"The negative outlook continues to reflect Petrobras' challenges to deleverage its balance sheet and the uncertainties and contingent liabilities stemming from the ongoing corruption investigations," S&P analysts Renata Lotfi and Luciano Gremone wrote in a report.
S&P rates Petrobras at "BBB-," its lowest investment-grade level. The rating is supported by S&P's view that the Brazilian government is "very likely" to support the company in case of financial distress. (Reporting by Walter Brandimarte; Editing by Lisa Von Ahn)