On Jul 16, Brazilian energy giant,
Petroleo Brasileiro SA
) declared that it was in talks with the electricity company,
Companhia Energética de Minas Gerais
) or CEMIG to sell its 40% stake in Gasmig, a Brazilian natural gas
distribution company. However, financial details of the transaction
have not been revealed.
Petrobras stated that this anticipated sale is in accordance with
its Business and Management Plan, which proposes non-core asset
sales in Brazil as well as globally.
Gasmig, with a natural gas pipeline network of around 850
kilometers, is the only distributor in the Minas Gerais region and
has a per-day distribution of 4.1 million cubic meters of natural
Headquartered in Rio de Janeiro, Petrobras is the largest
integrated energy firm in Brazil. The company's activities include
exploration, exploitation and production of oil from reservoir
wells, shale and other rocks. The company also engages in the
refining, processing, trading and transportation of oil and oil
products, natural gas and other fluid hydrocarbons, in addition to
other energy-related activities.
Last week, Petrobras announced that it anticipates roughly $15.0
billion decrease in its profits between 2014 and 2018 if it is
obliged to suspend the oil platform deal with SBM Offshore − a
marine service provider in Holland. Petrobras added that its
production of oil and natural gas will be significantly reduced if
it stops utilizing the floating oil production platforms of SBM
Petrobras is expected to release second-quarter results on Aug 8
and the Zacks Consensus Estimate is currently pegged at 48 cents
per ADR. The company currently has a Zacks Rank #2 (Buy).
One could also consider other emerging market oil integrated stocks
China Petroleum & Chemical Corp.
), both of which have a Zacks Rank #2.
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PETROBRAS-ADR C (PBR): Free Stock Analysis
CEMIG SA -ADR (CIG): Free Stock Analysis Report
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