SAO PAULO/RIO DE JANEIRO: Brazil's Petroleo Brasileiro SA will press ahead with a $15 billion asset sale program to pay off debt and limit further cuts to its investments as oil prices tumble to 12-year lows, the state-led oil company told analysts on Friday.

In a note to investors, Itau-BBA said Petrobras executives also stressed that a 25 percent cut in five-year capital spending to $98.4 billion announced on Tuesday will have a limited impact on the oil production outlook at Petrobras.

Itau-BBA oil and gas company analyst Diego Mendes said the executives provided "sound explanations" for Tuesday's cuts to capital spending and output. But Itau-BBA said a revival in

Petrobras' stock, now approaching 13-year lows, will happen only when the company delivers on its promises.

"Although management is working hard to put the company back on track, the challenges are huge and we expect the market to price-in the potential improvements in the operations and in the profitability only when they show up in the result," Itau-BBA wrote.

Petrobras has cut its investment budget three times in the last year as the price of benchmark Brent crude oil fell 40 percent. A slide in the Brazilian real has also driven up the local-currency cost of its foreign borrowing. At about $130 billion, its debt is the largest of any oil company.

Meanwhile, a corruption scandal has kept Petrobras out of most capital markets. On Friday, it canceled a domestic bond sale because it couldn't sell the debt at rates acceptable to both the company and investors.

As the company struggles to cover its obligations, Petrobras' cash position could slip by about 40 percent to as low as $15 billion in 2017, executives told analysts.

Petrobras told analysts that it would not rule out financial help from the government but that it was not being discussed now and was only to be considered as a "the last and only last resource", Itau-BBA said.

Brazilian President Dilma Rousseff, a former chairwoman of Petrobras' board, told reporters in Brasília on Friday that she would not rule out the possibility that the government may have to pump more cash into the company if oil prices continue to fall.

The sale of assets is seen as the only way to keep up investments in new production needed to pay future debt. So far, Petrobras has sold less than 3 percent of the $15.1 billion target in its latest strategic plan.

Itau-BBA said executives explained that if Petrobras delivers on the entire divestment plan, it will not need to borrow any money in 2016.

Tuesday's changes to the plan cut Petrobras' outlook for 2016 oil output in Brazil by 1.8 percent to 2.14 million barrels a day (bpd) and its outlook for 2020 to 2.8 million bpd.

Executives told analysts the cuts were small despite the capital budget cuts because of a reduction in exploration spending, shorter drilling times and more efficient efforts at connecting production wells.