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Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) Won’t Dilute Shares Prior To 2030

Boston, MA 07/03/2014 (wallstreetpr) – Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) made an important announcement this week that should come as good news for shareholders. The company’s CEO said she don’t expect to issue new shares that would have a dilutive impact on the stock before 2030. The company has 2030 as the end horizon of its long-term business plan.

The company is presently struggling to regain its footing amid poor prices in the domestic market, high exploration costs and high costs of commodity imports. Nonetheless, the company maintains that its future is bright if it can meet its production targets set for 2020.

The announcement that Petroleo Brasileiro (NYSE:PBR) will not dilute its shares anytime soon comes at a time when the company also announced a deal with the company that is likely to increase its previously declared investment budget.

Direct Deal

The world’s most indebted oil company recently landed a direct deal from the Brazilian. However, the development has been soaked in concerns although in the face value it is expected to boost the company’s production target.

Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) will add another 10 – 15 billion barrels of offshore oil reserves through the latest deal with the government of Dilma Rousseff who is seeking reelection.

The company targets to hit production target of 4.2 million barrels per day by 2020.

Political Meddling

Most challenges facing Petroleo Brasileiro (NYSE:PBR) can be traced to government meddling in the company’s operations. As such, the move by the government to award the company a direct deal while bypassing an auction process has succeeded in raising more concerns that the government influence in the company is getting deeper, which is not good for private investors.

As a matter of fact, the surprise deal with the company has seen analysts moving to downgrade the stock of Petroleo Brasileiro, citing lack of clarity in the transaction. Bruno Montanari, an analyst at Morgan Stanley (NYSE:MS), lowered his view on the stock of Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) to a “Hold.”

Published by Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. You may contact Brendan via his email ([email protected]) or his Google+ page (

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