* Accounting change saves 8 bln reais, avoids Q2 loss
* Result helped by cost cuts, fuel rise, asset sales
* Profit beats expectation, operational problems linger (Adds additional result information, company comment)
By Jeb Blount
RIO DE JANEIRO, Aug 9 Brazil's state-controlled oil company Petroleo Brasileiro SA on Friday reported second-quarter profit of 6.20 billion reais ($2.71 billion), reversing a year-earlier loss after an accounting rule change allowed it to avoid $3.5 billion in exchange-rate losses.
The quarterly profit, announced in a securities filing, beat the average estimate of 5.08 billion reais of 12 analysts in a Thomson Reuters survey. In the second quarter of 2012, the company lost 1.35 billion reais, its first negative result in 13 years.
The turn-around resulted from the adoption of "hedge accounting" rules to limit the impact of a stronger U.S. dollar on the company's foreign-currency debt.
Without the accounting change, Petrobras, as the Rio de Janeiro-based company is known, would have had to account for nearly 8 billion reais of currency-related charges and would have posted its second quarterly loss in a year.
Petrobras also benefited from cost cutting, higher fuel prices, fewer writedown charges for noncommercial wells and the $1.91 billion sale of half its African assets.
"The asset sales in the second quarter not only contributed to cash flow for our priority projects to produce oil in Brazil, but they also will free us of $5.2 billion of expected capital costs through 2017," Chief Executive Maria das Graças Foster said in the statement.
"In the past 12 months we decreased our presence to 17 countries from 23, shut down 15 companies and expect to shut another 38 by December 2015," she added.
Profit, though, was down 19 percent from the first quarter, a sign that Foster is still having trouble trimming costs and increasing operation efficiency enough to reduce "downstream" refining losses and make up for falling output and government-mandated fuel subsidies. The operations were also hurt by lower world oil prices.
While accounting changes freed the company of nearly 8 billion reais ($3.5 billion) of expected non-operational exchange-rate-related losses on debt, a weaker real has also hurt the company's refining and fuels operations by making imports more expensive and wiping out much of the impact of four domestic fuel-price increases in the last year.
These hedge accounting rules allow the company to set aside dollar revenue over several years to limit exchange-rate moves on non-cash financial earnings, smoothing out both positive and negative currency-related impacts.
The move is permitted under the International Financial Reporting Standards (IFRS) of the IFRS Foundation. Brazil's Vale SA, the world's No. 2 mining company, said Thursday it was considering adopting the same hedge accounting rules after its profits were slashed by nearly $3 billion in non-cash exchange-rate losses.
Petrobras said in June that the change will move investors' focus from usually temporary financial shifts that are beyond the company's control and put it on how much oil the company produces, the efficiency of its refineries and oil platforms and other operational activities.
Petrobras also reported that it had net sales, or total sales minus sales taxes, of 73.63 billion reais, 8.20 percent more than a year earlier but below the survey's estimate of 75.06 billion reais.
Second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of the company's ability to generate profit from oil production, refining and other operations, rose 71 percent to 18.09 billion reais from the same quarter a year earlier.
The EBITDA result beat the survey average of 16.13 billion reais.
($1 = 2.2862 Brazilian reais) (Additional reporting by Walter Brandimarte and Sabrina Lorenzi; Editing by Ken Wills)