Majority of Petrobras oil fields in Brazil won’t turn a profit

Kenneth Rapoza – Forbes, 01/25/2016

Unless oil prices suddenly hit $40 again, some 80% of the oil fields owned by Brazil’s Petrobras are money losing operations. Smaller fields, both on and off shore, that produce less than 100,000 barrels a day might be returned to the National Petroleum Agency, the outfit that regulates the sale of Brazilian oil fields, or offer them to competitors. Offering them to the market seems to be the wisest decision. Other than sitting on them and leaving them idle, Petrobras stands to lose over one billion reals if it returns the fields to the Agency, Estado de Sao Paulo newspaper reported on Monday in a long feature on the beleaguered oil giant.

Petrobras is Brazil’s biggest oil producer. It is majority owned by the government and so that means whenever the Agency auctions off concession rights to oil companies, Petrobras automatically gets a cut of the deal. This is the most relevant oil company south of the Rio Grande. Nothing compares to it. Not PDVSA. Not PeMex.

But for Petrobras to make real money off its prize possessions sitting deep under the Atlantic Ocean floor, oil needs to be between $35 and $40 at least. It’s currently a little over $31.

Read more…


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s