Brazil's Rousseff: Will hold people accountable in Petrobras scandal

Rousseff said at a White House news conference that some Petrobras employees engaged in corruption and that federal prosecutors are investigating the matter.

"Some employees working for Petrobras did engage in corruption or acts of corruption," she said. "The circumstantial evidence that is available from the prosecutors are pretty substantial."

On Monday the state-run oil company slashed its long-term spending plan to the lowest level in eight years as new management moved to reduce the industry's largest debt burden and restore confidence.

The scandal could hit Brazil particularly hard because in recent years the oil giant has spent about $40 billion a year, an amount about double the entire Brazilian federal government's discretionary budget for roads, ports, hospitals, new computers and other infrastructure.

However, Rousseff, who chaired Petrobras' board from 2003 to 2010, added that it was a "strong company" which was managed properly and well governed.

"Were that not the case … how could you possibly understand that it has come to a production level of 800,000 barrels a day," Rousseff told the news conference.

U.S. President Barack Obama declined to comment on the case, citing the ongoing investigation.

Brazilian prosecutors are sharing their investigation of foreign companies with the Department of Justice and Securities and Exchange Commission in the United States, which wants to make sure companies comply with the Foreign Corrupt Practices Act.

(Reporting by Jeff Mason, Roberta Rampton, Susan Heavey and Idrees Ali; Additional reporting by Caroline Stauffer and Jeb Blount)