Petrobras (PBR), the Brazilian oil giant and one of the largest oil producers in the world, recently announced its third quarter results, bringing in R$7.3 billion ($4.2 billion) in earnings. Although down from R$9.84 billion in the same quarter last year, the figures narrowly beat Bloomberg’s average analyst estimates of R$7.25 billion.
The results reflect a challenging quarter, in which oil prices dropped 41 percent from a year ago. Indeed, Petrobras’ competitors all took similar hits on the back of lower crude prices, most of them to a greater degree than Petrobras (ExxonMobil’s third-quarter profit fell a whopping 68 percent and Royal Dutch Shell’s profits fell 62 percent). With production strong and on track to fulfill output targets, and with various long-term opportunities waiting to be exploited, we believe that Petrobras’ long-term prospects remain as strong as ever.
Petrobras has one of the world’s largest proven oil reserves and is among the top ten companies in the world in terms of oil and gas production, as well as total refining capacity. The CEO, Jose Sergio Gabrielli, said in a recent interview that Petrobras’ proven reserves could more than double to around 35 billion barrels in the next two to three years, up from roughly 14 billion now.
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