Petrobras - Petroleo Brasileiro S.A.NYSE
Can Petrobras Be Saved?
Stanislav Ermilov • 54 Comments
Stanislav Ermilov • 54 Comments
Today, 12:42 PM
- Petrobras (PBR -0.1%) reiterates its goal of selling more than $4B in assets by the end of the year, despite a preliminary ruling by Brazil’s federal auditing court that suspended all but five asset sales that are already under way and another decision suspending the planned sale of a majority stake in its fuel distribution subsidiary.
- PBR says it still expects to meet its target of selling $15.1B in assets during 2015-16, despite only having announced transactions worth ~$10.7B; PBR says the five unidentified assets could bring in ~$3.3B.
- Both rulings could be reversed, but analysts said they highlight the unexpected roadblocks that PBR could face as it seeks to raise cash in a market already flooded with energy assets due to the downturn in oil prices.
Yesterday, 6:54 PM
- Brazil's federal auditing court asks Petrobras (NYSE:PBR) to temporarily suspend its divestiture program while the court reviews asset sales procedures.
- The court says five ongoing PBR asset sales totaling ~$3.3B that are nearing conclusion can be finalized, but asks the company to refrain from signing any new sale plans.
- In its decision, the court says PBR should be much more transparent in its divestiture program since it is a state-controlled entity.
- The decision could delay the company's attempts to raise $15B from asset sales by the end of 2016 as a way to reduce its huge debt.
Mon, Dec. 5, 6:18 PM
- Petrobras (NYSE:PBR) says it will raise prices at its refineries by 9.5% for diesel fuel and 8.1% for gasoline, beginning tomorrow, citing a spike in oil prices in recent days and a depreciation in Brazil’s currency.
- Under its relatively new management team, PBR is reviewing fuel prices at least once every 30 days; the latest increase will largely reverse the sizable price reductions announced on Nov. 8, which raised concerns among some investors and may have contributed to a selloff in its shares.
Mon, Dec. 5, 3:57 PM
- A Brazilian federal court issues an injunction to block the sale of Petrobras's (PBR -2.1%) fuels distribution unit, granting a request by an oil workers union that argued the company should hold a public tender to sell the stake in the subsidiary instead of the current private negotiation.
- PBR wants to sell a stake in BR Distribuidora, Brazil's largest fuel distribution company, as part of a divestment program that aims to raise cash to reduce its large debt load.
Mon, Dec. 5, 3:18 PM
- Braskem (BAK +6.3%) gains as much as 10% following Friday's 13% surge on news of an international legal settlement in Brazil’s Car Wash corruption investigation.
- Latin America's largest petrochemical firm said Friday it was in advanced talks with authorities in Brazil and the U.S. for a leniency agreement related to the scandal, after BAK's parent Odebrecht signed a $2B leniency deal with prosecutors to settle its own liabilities in the corruption probe.
- An agreement could help allow Odebrecht and Petrobras (PBR -1.3%) to sell their stakes in BAK, as it could eliminate liabilities related to the probe, making it easier to attract a bidder.
Mon, Dec. 5, 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.