DaveinHackensack

Petrobras: Set to Become a Global Oil Major - Barron's

Jake Blues,

Ken Heebner is indeed a genius, and if memory serves, he bought PBR last year before it ran up 100%. I am not sure if he is still adding to it at these prices.

Petrobras: Set to Become a Global Oil Major - Barron's

VSD,

A few points are worth noting here:

1) Brazil's president may come from a leftist background, but he has governed the country mostly as a pragmatic centrist.

2) The government ownership of PBR is a feature, not a bug: it puts PBR shareholders on the same side of the table as the Brazilian government. As a PBR shareholder, Brazilian resource nationalism works to your advantage. Who do you think is going to get the lion's share of any new discoveries off the coast of Rio de Janeiro, Petrobras, or a foreign joint venture partner such as Respol? The question answers itself.

3) The engineering challenges of the Tupi field are daunting, but most likely surmountable.

4) Environmentalists? Brazil isn't the United States. Its *leftist* president is enthusiastic about drilling this oil. You think his political opponents on the Brazilian right are against it? There seems to be more pragmatism across the political spectrum in Brazil; unlike the here in the U.S., the idea of leaving billions of barrels of oil in the ground seems to have never occurred to them.

Petrobras: Set to Become a Global Oil Major - Barron's

The world may still have plenty of oil, but getting to much of it is becoming more difficult and expensive. Petrobras's Tupi field, which is under a miles-thick layer of salt, that itself is miles under the Atlantic Ocean, is an example of this. Eventually, as such new sources of oil come on stream (and as new technologies such as plug-in hybrids temper demand), oil prices may be lower than they are now. But since there are such long lag times involved in both significantly increasing supply and reducing demand, I am bullish on oil over the next five years at least.

Since current oil prices haven't been priced in to a number of oil stocks, there are bargains there. Petrobras has great potential, but it's not one of the bargains at this point, IMO.

Oil Will Peak at $150-200 - Barron's Interview

"the $75/bbl prediction reduces his credibility."

It increases it, in my eyes. Understand: I am bullish on oil over at least the next 5 years. I am long XOM, BPT, EGY, CVX and TIRTZ.OB (that last one is mainly natural gas). But the world isn't running out of oil -- it's just that the remaining oil is harder to get.

Prices this high are spurring a lot of investment in bringing on new supply. They are also spurring investment in more fuel efficient cars, etc. The reason why I am bullish on oil for at least the next 5 years is that it will take at least that long for these investments to meaningfully increase global supply or decrease global demand. Eventually, they will do both. Most assuredly, they will. Count on it.

When that happens, $75 oil may happen again. But that's years off. So I'm long on oil stocks for the next several years.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

Brian Pursley,

You're right that the supply is low due mainly to political factors. You're also right that the world has plenty of oil. I agree with both of those premises of yours and I'm still bullish on oil, at least for the next 5-7 years. Why? Because it will probably take at least that long for supply increases to catch up with demand. A lot of these projects take years to get the oil flowing, and everyone won't be trading their car for a hybrid overnight.

Six Positions I'm Bullish On

I bought BPT last year too. I've been reinvesting the big dividends in an IRA. No complaints.

Have you looked at this oil stock: EGY?