Brazil Oil Major Petrobras Shares Fall 10% After Plans to Privatize Shelved by New President Lula

Petrobras shares fell -10.75% Tuesday to $9.51-1.14 after the Brazilain oil major was no longer going to be privatized. Luiz Inacio Lula da Silva in one of his first official acts after being sworn in as Brazil’s president on January 1 was to remove Petrobras (PBR) and Brazil’s postal service from the list of state asset sales from a list of state-controlled businesses that had been scheduled for privatization. Lula plans on turning PBR it into a renewable energy powerhouse.

via Petrobras 23-27 Plan

Lula has selected Jean Paul Prates, a senator for the new president’s Workers’ Party and a former Petrobras official, as the new head of the oil company. Prates has said Petrobras’ previous management was steering the company “off a cliff” by narrowly focusing on oil and gas and neglecting the energy transition. The Lula government has suggested doubling of Petrobras’ capex to invest in renewables and refining capacity while reducing fuel margins and cutting dividends to a minimum.

Petrobras had been increasingly concentrating its resources on assets in deep and ultradeep waters, where it has shown a great competitive edge over the years. Petrobras holds 100% stakes in the Peroá and Cangoá fields, located in shallow waters, whose average production from January to June 2022 was about 572 thousand m3/day of non-associated gas, and 100% stakes in the BM-ES-21 exploratory block, located in deep waters, where the Malombe discovery is located.

3R Petroleum Offshore offshore Polo Peroá asset is located in the Espírito Santo Basin

About Petrobras

Brazilian producer oil and gas, primarily engaged in exploration and production, refining, energy generation and trading. Petrobras has expertise in deepwater and ultra-deepwater exploration and
production as a result of nearly 50 years of development of the Brazilian offshore basins, making it the world leader in this segment.

PBR common and preferred shares are listed on the São Paulo Stock Exchange (B3 Level 2) and New York (NYSE). In 2022 the company had a base of over 815,000 shareholders and ADR holders and the
average daily financial volume traded in the first two months of 2022 was approximately US$1.2 billion on these markets. The controlling shareholder block is comprised of the Federal Government, BNDES and BNDESPar holds 36.61% of our total shares and 50.26% of voting shares.

Source: Petrobras

From The TradersCommunity News Desk