Chancer

Petrobras: Still a Sure Thing?

Obama administration also gave $20B to Brasil to go after the off shore oil. Seems hypocritical that we will not drill offshore in the USA for environmental reasons, but we can encourage other countries to drill off their coasts. We do not allow US companies to drill offshore in Florida, but it is OK for China to drill in very same spot. Just shows that environmentalism is just about power politics.

PBR is now also subject to the "political correctness" of using oil revenues to support Brasilian social causes as now demanded by activists in Brasil. PBR as an investment has become a question mark (?). Glad that I passed on PBR when I considered it.


On Sep 04 09:29 AM John Galt wrote:

> If you don't want the political risk with PBR, it is going to take
> an engineering/drilling marvel to extract that oil hudreds of miles
> offshores, down under thick layers of earths crust, rock and salt.
> They have already been contracting with RIG. ( I recently sold RIG
> but still own the driller NE). The US of A might not have/own the
> reserves, but we have the technology and know how to extract it.
>
>
> There was an article in the Washington Post yesterday about how BP
> found a huge oil field in the Gulf of Mexico. Transocean rig reportedly
> dug Transocean the deepest drilling hole ever in the ocean. It was
> something like 35 degrees at the bottom of the Gulf of Mexico, but
> then they also dug 30,000 or so feet under the sea floor where the
> core temperature was 250 or so degrees. It's amazing the technology
> these companies have.
>
> One thing you have to watch for with Petrobras is the Brazilian Real.
> That currency moves and I didn't check it today but if the currency
> can move from 2.7 Reals per dollar to 2 Reals per dollar, do the
> math on how that effects profits that are converted and reported
> to dollars.
>
> They do have political risks ( as noted) and the stock took off with
> high oil prices and when the Tupi oil fields were found. The stock
> was more or less treated as a "sure thing" where as there were a
> lot of questions. The pump job from Ken Heeber ( and a lesser extent
> Soros) also helped make this stock overvalued. I studied this company
> and determined it was a no buy early on but haven't kept up with
> it as much.
>
> $