Brazilian state-run energy company Petroleo Brasileiro S.A. or Petrobras PBR announced that it has entered into a deal with PetroRio S.A – engaged in oil and gas exploration, and production activities.
Per the agreement, Petrobras will likely divest its 20% interest in the concessions of Bijupirá and Salema oil and gas fields, located at water depth of 480–850 meter in the Campos Basin. Presently, these fields are being operated by Royal Dutch Shell plc RDS.A. It is to be noted that from the sale, Petrobras will likely get $25 million.
Average production of oil − of 28 to 31 degree API − from the fields is 22,000 barrel per day while the daily gas output stands at 325,000 cubic meters.
Petrobras added that the asset divestment is in sync with the business and management plan for the period 2015–2019. We believe that the sale proceeds will also help the company to lower its mounting debt as it has been facing difficulties in raising money from the market since its involvement in a multimillion dollar money laundering scam was exposed.
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company’s activities include: exploration, exploitation and production of oil from reservoir wells, shale and other rocks, as well as refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
However, the company’s upstream operations continue to face the challenges of weak crude prices.
As a result, Petrobras currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, a couple of better-ranked players in the energy sector are Pembina Pipeline Corporation PBA and Tallgrass Energy Partners LP TEP. Both stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment