OREANDA-NEWS. Brazilian state-controlled Petrobras is threatening to take its thermoelectric plants off stream unless it receives roughly R1.5bn ($418.9mn) in past-due payments.

Electricity regulator Aneel told Argus that Petrobras sent a letter to the agency in late February warning that it could be forced to suspend thermoelectric generation because of the large amount of arrears.

Petrobras confirmed that it is in negotiations to normalize payments from the electricity clearing house CCEE.

Brazilian thermoelectric generation association Abraget estimated that Brazilian thermoelectric generators were still awaiting roughly R2bn in past due payments from CCEE at the end of February.

This amount has likely increased since then, following the most recent payout for the spot market in early March for power delivered to the grid in December, in which only R1.1bn was paid by distributors to generators.

The unpaid amount is equivalent to 78pc of the R4.9bn due for the month of December.

Petrobras has also suffered from non-payment for fuel delivered to thermoelectric plants controlled by Brazilian state-controlled utility Eletrobras. Most of these plants use diesel and fuel oil and are located in regions that are not connected to the national grid.

In its 2015 earnings statement, Petrobras said unpaid debts for fuel supply to Eletrobras totaled R9.93bn.

Petrobras said it had expected government policies to tackle the overdue payments, but has been "frustrated" because these payments remain delinquent.

The company was forced to write-off R1.88bn in losses stemming from unpaid fuel debts in 2015.

In August 2014, Eletrobras reached a deal to pay R3.3bn in past-due debts to Petrobras over an 18-month period.

Petrobras is seeking to sell some of its thermal generating assets as part of a broad divestiture campaign.

The company owns stakes in 36 power plants with installed capacity of 6,885MW. In addition to its 21 thermoelectric plants, it also has five wind farms and two small hydroelectric plants.

The company recorded a record $8.6bn in losses after taxes in 2015, according to results issued this week.

The dispute over back payment draws attention to the growing role of thermal generation in Brazil?s electricity system, which historically relied mainly on hydroelectricity. Many thermal units use imported LNG.