Petrobras woes reach Europe amid slowdown

When Italian oil services company Saipem SpA spent $300 million at the start of the decade in Brazil, it joined a long list of foreign companies jockeying for business with Petroleo Brasileiro SA. Now it's struggling to get paid.

Saipem is one of at least five European companies that spoke about late payments, delivery delays or other difficulties in Brazil during fourth-quarter earnings calls. While day-to-day operations are functioning, Petrobras partners are also facing decision-making obstacles that are inhibiting planning, said officials at partners Galp Energia SGPS SA, BG Group Plc and Repsol SA, who asked not to be named.

It's a stark reversal from five years ago when a wave of European and US oil-services companies eagerly flocked to Brazil to build plants and set up offices. Back then, Petrobras was ramping up investments to more than $100 million a day after making the Western Hemisphere's biggest crude finds in decades. Today, Petrobras is slashing spending as oil prices plunge and it's all but locked out of credit markets because of a sweeping corruption scandal.