Brazilian state-run energy giant
Petroleo Brasileiro S.A., or Petrobras
) announced that its proven oil and gas reserves for 2012 has
increased by 0.1% as compared to 1% growth on 2011. According to
the criteria of the U.S. Securities and Exchange Commission, by
the end of 2012, the company's crude reserves have reached 12.884
billion barrels of oil and natural gas equivalent (boe) whereas
reserves were 12.873 billion boe for 2011.
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Management said that for the year 2012, 0.896 billion boe were
assigned as proved reserves as it can be recoverable, of which
0.884 billion boe were used up, concluding an addition of 0.011
billion boe to the total reserves of 2011.
The slight upside in reserves for 2012 have stemmed from the new
discoveries in Brazil and in the Gulf of Mexico, which were much
smaller than the huge findings in Santos and Campos basins of
Brazil during the previous year.
Headquartered in Rio de Janeiro, Petrobras is one of the biggest
energy companies in the world along with
Royal Dutch Shell plc
Petrobras was incorporated in October 1953 to conduct the
Brazilian government's hydrocarbon activities, which currently
holds a 48% stake (and 63% voting share) in the company. The
company operates in six segments: 'Exploration and Production,'
'Refining, Transportation and Marketing,' 'Distribution,' 'Gas
and Power,' 'Biofuels' and 'International.'
Petrobras currently retains 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.
According to the CIA World Factbook, Brazil holds 15th place in
the world in terms of total oil and gas reserves. Moreover,
Brazil is expected to be among the world's four largest oil
producers this decade, due to the country's huge offshore crude
discoveries. Hence it is expected that the company can strengthen
its operations from the new discoveries and can grow its earnings
significantly in the near future.
On the flip side, Petrobras' results are heavily levered to
changes in the overall energy price environment, which are
inherently volatile and subject to complex market forces.
Brazilian politics and economics and changes to the country's
energy legislation may have important effects on the company.