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Turbulent Times At Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)

Boston, MA 10/30/2013 (wallstreetpr) – Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) seems to be experiencing turbulent times in the energy sector especially after recording net earnings totaling $1.6billion decline of 39% as compared to the same quarter in F2012. The earnings fell relatively below analysts’ consensus driven by stagnant crude oil output. The company claims imports greatly undercut its profit as the Brazilian government forced it to provide subsidized fuel costs to the Brazilian market. Petrobras has been grappling with harsh operating conditions from the Brazilian government instead of being allowed to apply international prices to the Brazilian market. Petrobras Q3 revenues rose by 5% to clock 77.7B reais while its adjusted EBITDA fell by 28% Y/Y to 13.1B reais.

 Petrobras does not have the advantage of operating on its own but is constantly faced with regulations from the government and its own employees. This has resulted in its stock not performing as it should in the stock market. Petrobras hopes the market overlooks the Q3 result to enable it achieve price parity. Price parity will do a great justice to the stock prices boosting its earnings and bringing a higher degree of outperformance. Petrobras declining output at its biggest production has prompted Granenergia owned by Billionaire Gradin Family to spend $500 Million to boost three offshore vessels.

In other good news, Petrobras has been handed a portion of the massive offshore oil field, Libra and expected to own 45% interest in the massive field. This news came after the company revealed it had completed another production platform as it tries to boost its output this year. The P-55 platform is one of the nine platform expected to enter into the market to boost oil production that had stagnated at 2M bbl/day. The platform will produce 180K bbl. /day and treat up to 4M cubic meters of natural gas a day.

Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing.

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