Petrobras - Petroleo Brasileiro S.A.NYSE
Can Petrobras Be Saved?
Stanislav Ermilov • 54 Comments
Stanislav Ermilov • 54 Comments
Today, 3:35 AM
- In a highly anticipated opening to foreign oil companies, Mexico will hold its first auction of deepwater oil and gas blocks today.
- The waters are believed to hold important energy reserves, but Mexico's longtime national oil company Pemex, does not have the capital or expertise to develop them.
- Investors are closely watching the results as a measure of the energy overhaul's success as well as potential bidders BP, Chevron (NYSE:CVX), Petrobras (NYSE:PBR) and Statoil (NYSE:STO).
- ETFs: EWW, MXF, MXE, UMX, DBMX, SMK, QMEX, HEWW
Thu, Dec. 1, 3:44 PM
- Prosecutors pursing corruption at Petrobas (PBR -2.9%) have threatened to resign over a bill being fast-tracked through Congress which would allow prosecutors and judges to be the focus of charges.
- Source: FT
- The new law, say some (prosecutors and judges) will have the effect of curbing investigations. Analysts say the bill is an attempt by lawmakers to stop the Petrobras probe from spreading to them.
- President Michel Temer has not yet committed as to whether he would sign the bill.
- The Bovespa is lower by 3.9%. EWZ -5.9%, VALE -2.9%, ITUB -6.2%, BSBR -10%
Wed, Nov. 30, 9:50 AM
- Shares of energy companies surge at the open, as hopes for an OPEC deal to cut production send crude oil futures soaring.
- Reports say Saudi Arabia is prepared to accept "a big hit" to production and agree to Iran freezing output at pre-sanctions levels.
- In early trading: XOM +2.2%, CVX +2.3%, RDS.A +3.6%, BP +3.4%, TOT +1.7%, STO +5.1%, PBR +8.1%, COP +7.2%, MRO +12.1%, APC +8%, DVN +12.7%, HES +9.5%, ENB +2.1%, PSX +0.8%, SLB +4.2%, HAL +8.3%, BHI +4.3%, KMI +4.8%, EPD +2.7%, ETP +3.8%, WMB +5.4%, RIG +11.3%, SE +2.2%, CHK +9.4%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, PXI, FIF, PXJ, RYE, NDP, GUSH, PSCE, DRIP, DDG, FXN, CRAK
Tue, Nov. 29, 10:20 AM
- Crude oil continues to slide - WTI now -3.8% at $45.27/bbl, and Brent -3.8% at $46.40/bbl - dragging oil and gas equities (XLE -2.1%) down with it.
- Iran's oil minister says he is not prepared to reduce supply, and Saudi Arabia says it would not participate in a production deal without Iran and Iraq.
- Reuters reports that Iran has written to OPEC saying Saudi Arabia needs to cut oil output to 9.5M bbl/day; Saudi has said it was prepared to reduce its production only by 500K bbl/day from current levels of 10.5M.
- In early trading: XOM -1%, CVX -1.7%, RDS.A -1.4%, BP -1%, TOT -0.3%, STO -1.8%, PBR -3.7%, COP -2.9%, MRO -4%, APC -2.8%, DVN -2.7%, HES -3.6%, ENB -2.3%, PSX -1.2%, MPC -0.8%, SLB -2.2%, HAL -2.3%, BHI -2.1%, KMI -1.4%, EPD -2%, ETP -2.2%, WMB -2.4%, SE -2.3%, CHK -2.6%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, FIF, PXJ, RYE, NDP, GUSH, DRIP, DDG, FXN, CRAK
Tue, Nov. 29, 9:15 AM
- Petrobras (NYSE:PBR) says it used half the proceeds from the sale of a Brazilian offshore oil field for early repayment of a loan taken from state development bank BNDES, its latest step toward reducing the world's largest debt burden among global oil groups.
- Separately, CEO Pedro Parente told a conference hosted by Brazil's sugar cane industry that the growing deficit between demand and the company's gasoline refining capacity creates an opportunity for local ethanol mills.
Wed, Nov. 23, 6:15 PM
- Petrobras (NYSE:PBR) says its board has approved agreements to settle 11 investor lawsuits related to the Car Wash corruption scandal under investigation since 2014.
- Among the shareholders with whom PBR settled are Aberdeen Emerging Markets Fund, State of Alaska Department of Revenue, Ohio Public Employees Retirement System and Abbey Life Assurance Company.
- A class action suit claiming tens of billions of dollars of shareholder losses remains unresolved, and PBR says it cannot make a reliable estimate of its outcome.
Tue, Nov. 22, 8:54 AM
- Petrobras (NYSE:PBR) is seeking to modify the terms of a profit-sharing pact with workers, as disputes between the state-controlled company and unions escalate, Reuters reports, citing the Valor Econômico newspaper.
- Unions leaders reportedly said the proposal could include barring a current rule that would guarantee a one-time bonus for workers even if the company posts an annual loss; a work stoppage may take place Nov. 30 to protest a potential revision of the profit-sharing agreement, according to the report.
- Unions are challenging CEO Pedro Parente attempts to limit pay raises and sell assets, and recently won an injunction to halt the sale of two oil fields to Australia's Karoon Gas.
Mon, Nov. 21, 11:58 AM
- Brazilian prosecutors in the Operation Car Wash corruption probe say Petrobras (PBR +4.3%) will receive another 204M reais ($60.4M) retrieved from politicians and companies who agreed to cooperation in the investigation.
- The payment is the result of plea deals struck by prosecutors with politicians, and is in addition to more than 500M reais (~$150M) in compensation PBR already has received.
- Separately, PBR says an injunction in a civil lawsuit has forced it to suspend the sale of stakes in the Baúna and Tartaruga Verde oil fields to Australia's Karoon Gas; it says it plans to appeal the decisions.
Thu, Nov. 17, 6:56 PM
- Petrobras (PBR, PBR.A) approves the sale of its liquefied petroleum gas unit to Ultrapar Participações (NYSE:UGP) for 2.8B reais ($819M), confirming earlier reports.
- The market considered the price tag on the high side; PBR preferred shares, the company's most widely traded class of stock, closed 3.2% lower after gaining as much as 3% during regular trading.
- Analysts at Banco BTG Pactual and Banco Brasil Plural say the deal will be subject to tough scrutiny by Brazil's government antitrust agency CADE.
Thu, Nov. 17, 2:19 PM
- Petrobras (PBR -1.7%) is close to announcing a sale of its liquefied petroleum gas distribution unit to Ultrapar Participações (UGP -0.9%) in a deal expected to fetch ~2.8B reais ($822M), Reuters reports.
- Analysts say the high price tag for Liquigás Distribuidora, estimated more than 10x operational earnings, is explained by UPG's need to add Liquigás to further gain scale that could translate gradually into strong margin expansion.
- The Liquigás deal is part of an asset sale program designed to cut PBR's massive $130B of debt, the highest in the global oil industry.
Tue, Nov. 15, 3:59 PM
- California Resources (CRC +19.9%) surges nearly 20% for its biggest intraday jump since August after the George Soros bought a new stake in the oil explorer.
- Soros also bought more than 3M shares in pipeline owner Williams Cos. (WMB +2.7%), and took smaller positions in Petrobras (PBR +4.5%) and Rice Energy (RICE +4.1%), while selling his position in the SPDR Gold ETF (GLD +0.8%).
- Today's crude oil rally also is having an outsized effect on CRC, whose $32.50-$33.50/boe production costs make it very much a marginal-cost/bbl supplier of oil; a $1/bbl change in the Brent price equates to a $2.5M increase in net income, according to the company's own price sensitivities index.
Mon, Nov. 14, 11:49 AM
- Petrobras (PBR -5.5%) is off sharply in early trading after posting a 2% Y/Y decline in October oil production; shares have now dropped 19% over the past three days since reporting a huge Q3 loss and as Trump's election hammers emerging markets.
- PBR says October oil and natural gas production totaled 2.81M boe/day, with average oil production in Brazil at 2.19M bbl/day (bpd), a 2% drop since September, when the company reported a production record; PBR says it is moving toward an annual oil production target of 2.145M bbl/day in Brazil.
- Separately, at least one analyst thinks the stock's recent meltdown creates a buying opportunity, as Dogma Capital portfolio manager Danila Onorino notes PBR's $16B reduction in its debt since mid-2014; if PBR succeeds in trimming the fat on its balance sheet, it would look more like other state-controlled oil companies such as Russia’s Gazprom and Rosneft, which enjoy lower borrowing costs, Onorino says.
Fri, Nov. 11, 9:59 AM
- Petrobras (PBR -4.2%) opens sharply lower following release of Q3 results that saw growing losses and declining revenues as well as a drastic reduction in the value of its oil fields, petrochemical and logistics assets; shares are now down ~12.5% in the three days since the U.S. election.
- CFO Ivan Monteiro says PBR remains committed to meeting a $15.1B two-year goal for asset sales by the end of this year, even if only 65% of it has been completed so far.
- Meanwhile, new legislation passed in a late-night session by Brazil's congress will allow the company to begin selling off some of its huge pre-salt oil fields to raise cash; Brazil Pres. Temer still must sign the bill once a technical analysis of its contents has been completed.
Thu, Nov. 10, 6:29 PM
- Petrobras (NYSE:PBR) -4.3% AH after posted a massive and unexpected Q3 net loss after drastically reducing the value of oil fields, petrochemical and logistics assets; U.S.-traded shares already had shed 8.7% in today's regular trading.
- PBR says it lost a net 16.458B reais ($4.9B) in the quarter, nearly 5x more than the year-ago net loss of 3.76B reais and far worse than Reuters' average consensus estimate for a profit of 1.517B reais, as net revenues fell 14.4% to 70.44B reais.
- PBR was hit by impairments totaling 15.7B reais ($4.7B) on several upstream and downstream projects, attributed to a “review of projects in the investment portfolio,” exchange-rate fluctuations and a “review of the set of premises, such as the price of Brent [crude] and the long-term exchange rate.”
- Q3 total production rose 2.3% Q/Q to 2.87M boe/day, with domestic Brazil production gaining 4.2% to 2.22M boe/day due to a steep rise in pre-salt output from the Santos basin.
- PBR says its net debt fell 3.2% Q/Q to $100.29B at the end of the quarter.
- Separately, PBR says it concluded the completion of the first oil-producing well at the giant Libra pre-salt field in the Santos basin.
Wed, Nov. 9, 9:09 AM
- Petrobras (NYSE:PBR) says it will cut prices for gasoline and diesel, after more than a year of using its near-monopoly in the domestic fuel market to shore up its cash flows.
- The company's board says it will reduce the price of diesel and gasoline sold at its Brazilian refineries by a respective 10.4% and 3.1%, adding that the price cuts reflect a drop in international oil prices in recent weeks.
- PBR says if the full reduction is applied by distributors and gas stations, diesel prices may fall up to 6.6% and gasoline prices by as much as 1.3%.
- PBR -5% premarket as emerging market companies appear headed for broad losses today.
Mon, Nov. 7, 6:58 PM
- Petrobras' (NYSE:PBR) subsidiary in Bolivia and the country's state-run YPFB Chaco have signed a $1.2B agreement to explore two natural gas fields with potential reserves of 4T cf, the Bolivian government says.
- The fields are Astillero and San Telmo, in southern Bolivia; YPFB has a 40% stake in San Telmo and PBR has 60%, while PBR owns 40% in Astillero and YPFB has 60%.
- Both fields are expected to begin producing gas in 2022.