Barclays sees some LatAm energy stocks in favorable light, but dim on Russia

|By:, SA News Editor

Barclays regards Russian oil and gas companies as too risky for now, with no reason to assume any resolution to the Ukrainian crisis in the near term, but it sees Latin American energy stocks offering a more appealing set of risk/rewards.

Of the firm's two Overweight ratings among emerging market energy stocks, the firm says Pacific Rubiales (OTCPK:PEGFF) offers a combination of relatively small size, expertise in heavy oil and is positioned to take part in Mexico's energy reform.

The firm also likes Petrobras (NYSE:PBR), expecting near- to medium-term positive momentum following the Brazilian presidential election in October, but it remains concerned about production and reserve replacement at Ecopetrol (NYSE:EC).

In South Africa, Barclays believes Sasol (NYSE:SSL) is entering a period of sustainable positive momentum, with a number of potential near- to medium-term catalysts which could boost valuation.