Brazilian state-run energy giant,
Petroleo Brasileiro SA
) has entered into a deal with China National Petroleum Company
(CNPC), the largest integrated energy firm in China. Moreover,
CNPC is the parent company of Chinese energy giant
PetroChina Company Limited
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Per the agreement, Petrobras will divest its entire stake in
Peru-based subsidiary Petrobras Energia Peru (PEP), for a
consideration of roughly $2.6 billion. PEP owns three blocks -
Block X, Block 57 and Block 58 - in Peru. The combined production
from the assets currently stands at roughly 800,000 tons of oil
PEP's wholly owned Block X has been yielding oil since 1912. Last
year, the mature field generated 16,000 barrels of oil
equivalent. PEP has a 46.16 % ownership in Block 57, while
) holds the rest. However, to date, the condensed gas field has
not started its operation. Additionally, Block 58 is fully owned
by PEP and substantial gas and condensate has recently been
discovered in the field.
The deal is expected to close depending on regulatory approvals
along with certain necessary conditions.
Petrobras added that the asset sale is a portion of its
divestment program for the period 2013-2017. We believe that
through the sale of these assets, the company will be able to
focus more on the huge offshore oil deposits discovered still now
and hence will be able to increase its production significantly.
Headquartered in Rio de Janeiro, Petrobras is the largest
integrated energy firm in Brazil and one of the largest in Latin
America. The company operates through six segments: Exploration
and Production, Refining, Transportation and Marketing,
Distribution, Gas and Power, Biofuels and International.
Petrobras currently holds a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at energy firm like
) that offer better prospects. The stock sports a Zacks Rank #1