Petroleo Brasileiro Petrobras SA (NYSE:PBR) not petrifying investors any longer

Posted by Kristi Scott August 16, 2013 0 Comment 569 views

The largest producer of oil in the world, in ultra-deep waters, Petroleo Brasileiro Petrobras SA (NYSE:PBR) is finally showing some indicators of a rebound in production as suppliers have accelerated equipment-deliveries. PBR has already received 4/7 offshore production-units that are scheduled to arrive this year. The rest of them will also come in as planned.

In 2012, PBR had installed one of the three offshore production units that had been planned, amidst a slew of delays. Eventually, this ended up adding to its first annual dip since 2004 and its 1st quarterly loss in thirteen years.

The next steps

In June, production climbed to a 6-month high after the company began pumping from its 2nd vessel at Lula which is the 2nd largest discovery in Brazil. There is expected to be a 9% increase in domestic output in 2014 which will top the peak that was experienced in 2011. The added oil sales will automatically reduce its reliance on the debt-markets to finance $237B in investments right through 2017.

Gianna Bern, the president of the risk-management advisor, Brookshire Advisory and Research said that from an operational perspective, this is one of the most difficult work in this industry and setting-up even 1 of this is a commendable feat.
In 2013, in dollar terms, the company has lost 23% for its investors. It has been the worst performance for any oil company that has a market value of over $50B.

The company

The brazil-based Petroleo Brasileiro Petrobras SA (NYSE:PBR) is an integrated O&G company. Its activities are divided into 6 segments- Exploration & Production, Gas and Energy, Distribution, Biofuel and International. It conducts all its business independently or via its subsidiaries. The company is involved in extraction, research, processing, refining transport and trade of oil from shale, wells as well as other rocks. The Brazilian Government is the company’s largest shareholder.

About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

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