Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • Nikkei

    40,168.07
    -594.66 (-1.46%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Bitcoin USD

    70,723.16
    +1,827.38 (+2.65%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Gold

    2,243.20
    +30.50 (+1.38%)
     
  • Crude Oil

    83.06
    +1.71 (+2.10%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • FTSE Bursa Malaysia

    1,530.60
    -7.82 (-0.51%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Petrobras (PBR) to Sell Stake in Brazil Field, Cut Costs

Petrobras PBR and minority partner Chevron CVX announced plans to sell their stakes in the Papa-terra deep-water oilfield located in Brazil’s Campos Basin. Per Petrobras, the plan is in sync with its strategy to cut costs and improve capital allocation. Although the asset has a complex geology, the Brazilian oil giant stated it to be offered on attractive financial terms. Petrobas has a 62.5% operating interest in the project, while Chevron owns the remaining 37.5% stake.

Located at a water depth of 1,200 meters, Papa-terra field is part of the BC-20 concession. The oil field came online in 2013 and produces oil as well as gas through two offshore platforms — P-61 type Tension Leg Wellhead Platform and P-63 type Floating Production Storage & Offloading. Per the company, Papa-Terra’s average production in 2019 stood at 17,300 barrels of oil equivalent per day (BOE/D).

The latest sales offer is part of the company’s strategy to regain financial footing by selling assets and curtailing debt, as it continues to struggle post the breakout of a major corruption scandal years ago, where it had accepted bribes from construction firms in return for awarding them contracts at inflated prices.

Petrobras has targeted to sell assets worth $20-$30 billion over the next five years under its 2020-2024 investment plan. Last month, it had put the Golfinho and Camarupim fields up for sale. Assets sales are part of the company’s portfolio optimization strategy, where it has previously put over 100 mature onshore and shallow-water offshore fields on the auction block. Although some of the areas were sold previously or are still in the sales process, divestiture of the deep-water oilfield in Campos Basin marks Petrobras’ sale of higher-quality mature assets that still hold some upside.

ADVERTISEMENT

Apart from massive oil fields like Roncador and Marlim, Petrobras wants to shift its focus from many of its heavy oil legacy assets to the development of the larger subsalt fields, where production from a single well can average more than 40,000 barrels of oil equivalent.

As for Chevron, during the first quarter of 2019, it sold its majority ownership stake in Brazil's Frade field to Petro Rio, leaving Papa Terra as its last mature asset held in Brazil.

About Petrobras

Headquartered in Rio de Janeiro, Petrobras S.A., is the largest integrated energy firm in Brazil and one of the biggest 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 along with other energy-related activities. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Some better-ranked stocks from the Zacks Oils and Energy sector are given below:

California Resources Corporation CRC has trailing four-quarter positive earnings surprise of 711.1%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It carries a Zacks Rank #2 (Buy)

Suncor Energy SU has trailing four-quarter positive earnings surprise of 2.2%, on average. The company’s earnings beat the consensus mark in two of the last four quarters. The company carries a Zacks Rank #2.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


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
 
Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report
 
Suncor Energy Inc. (SU) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
California Resources Corporation (CRC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research