Brazilian state-run energy giant
Petroleo Brasileiro S.A.,
) entered into a 20-year agreement with Schahin Petroleo e Gas
S.A. and Modec Inc. to lease a floating production, storage and
offloading vessel, or FPSO in the pre-salt Santos Basin.
The facility will be operational in a production development
project in Iracema Norte, within the BM-S-11 block. The project
work covers the interlinking of the FPSO to 16 wells, of which 8
will be used for the production of oil and 8 for injection
With the FPSO slated to be delivered in October 2015, production
will likely start in December, same year.
As per the Letter of Intent signed, Petrobras will deploy the
FPSO some 186.4 miles off the Brazilian coastline and at a water
depth of about 7,329.4 feet. The platform exhibits a daily
processing capacity of 150,000 barrels of oil and 8 million cubic
meters of natural gas.
Apart from Petrobras - which holds 65% interest and acts as the
operator of the BM-S-11 concession - BG Group plc and Petroleos
de Portugal control respective stakes of 25% and 10%.
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 in six segments: 'Exploration and
Production', 'Refining, Transportation and Marketing',
'Distribution', 'Gas and Power', 'Biofuels' and 'International'.
In late October, this year, Petrobras announced third quarter
profit of R$5.6 billion or R$0.43 per share, compared with
earnings of R$6.3 billion or R$0.49 in the year-earlier quarter.
Earnings per ADR came in at 42 cents (1 ADR = 2 shares), way
behind the Zacks Consensus Estimate of 67 cents. During the
corresponding period last year, Petrobras earned 60 cents per
Petrobras' net operating revenues of $36.4 billion were down 6.3%
from the prior-year quarter level. The company's results were
dragged down by persistent weakness in its refining unit.
Petrobras - the fourth biggest company by market capitalization
Royal Dutch Shell plc
) - currently retains a Zacks #4 Rank, which translates into a
short-term Sell rating. We also maintain a long-term Underperform
recommendation on the stock.
CHEVRON CORP (CVX): Free Stock Analysis
PETROBRAS-ADR C (PBR): Free Stock Analysis
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.