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Petrobras (PBR) to Divest Offshore Oilfield Assets in Brazil

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Petroleo Brasileiro S.A. or Petrobras PBR decided to divest two of its operated oilfields, located in the Santos Basin off the coast of Brazil.

The oilfields were acquired through the Round Zero of the National Agency for Petroleum, Natural Gas, and Biofuels. The company operates with a 100% interest in both fields.

Petroleo began the opportunity disclosure stage to divest its entire stake in the Urugua and Tambau fields, which belong to the BS-500 Concession. The following stages of the project will be reported to the market in due course.

The fields are situated in the northern portion of the Santos Basin, between 140 and 160 kilometers offshore the state of Rio de Janeiro in 1,000-1,500 meters of water. In 2020, the fields produced 5 thousand barrels of oil per day and 32.4 million cubic feet of gas per day.

The transaction involves the Urugua-Mexilhao gas pipeline, which is 174-kilometer long and connects the Urugua field to a nearby platform. The FPSO Cidade de Santos MV20 is installed in the Urugua field and gathers production from the Tambau field. Both fields are in the Santos Basin.

The natural gas processed in the FPSO is delivered through the Urugua-Mexilhao pipeline. The vessel is capable of refining 350 million cubic feet per day of gas and 35,000 barrels of oil per day. It is the first FPSO, which processed more gas than oil and has a storage capacity of 700,000 barrels.

Petrobras is involved in an extensive divestment program, with the aim to pay off debt and free up capital for deepwater offshore projects. The latest transaction is in line with the company’s portfolio optimization strategy, as it focuses its resources on high-quality assets in deep and ultradeep waters, wherein it has shown a great competitive edge over the years.

Company Profile & Price Performance

Petrobras is the largest integrated energy firm in Brazil and one of the biggest firms in Latin America. Its activities include exploration, exploitation and the production of oil from reservoir wells, shale and other rocks. It comprises refining, processing, trading and transportation of oil and oil products, natural gas, and other fluid hydrocarbons beside other energy-related operations.

Shares of the company have outperformed the industry in the past six months. Its stock has gained 25.9% against the industry’s 12.7% decline.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Zacks Rank & Other Stocks to Consider

The company currently flaunts a Zack Rank #1 (Strong Buy).

Some other top-ranked players in the energy space are Range Resources Corporation RRC and Suncor Energy Inc. SU, each currently sporting a Zacks Rank #1, and Royal Dutch Shell plc (RDS.A), currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Range Resources’ 2021 earnings are expected to increase 35.4% year over year.

Suncor’s 2021 earnings are expected to rise 22% year over year.

Shell’s 2021 earnings are expected to increase 13.7% year over year.

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Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report

Petroleo Brasileiro S.A. Petrobras (PBR) : Free Stock Analysis Report

Range Resources Corporation (RRC) : Free Stock Analysis Report

Suncor Energy Inc. (SU) : Free Stock Analysis Report

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