By Jeffrey T. Lewis

SAO PAULO--Brazilian oil company Petroleo Brasileiro SA, or Petrobras, said Wednesday its board approved a change to dividend policy to permit payments to shareholders in years when it doesn't generate a profit.

Petrobras said it will permit dividend payments compatible with its cash flow when its net debt is more than $60 billion as long as it has reduced the debt level over the previous 12 months and the board determines that it won't damage the company's financial sustainability.

Any proposed dividend payments under those circumstances would be limited to the size of the reduction in net debt, the company said.

Petrobras said it also will be able to propose an extraordinary dividend when debt is less than $60 billion even if it didn't generate a profit in the period.

Petrobras will report third-quarter earnings later Wednesday, after the stock market closes.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

(END) Dow Jones Newswires

10-28-20 0821ET