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Petrobras Operational Update: October Production Improves

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Brazilian state-run energy company Petroleo Brasileiro S.A. or PetrobrasPBR has announced production report for the month of October. The company's total production has improved from the previous month. NYSE-listed ADRs of the company gained over 4% following the announcement.

Petrobras reported total oil and natural gas production of 2.76 million barrels of oil equivalent per day (boed) in October, up from 2.72 million boed in Sep 2015.

Brazil Production Volumes

The company reported oil and natural gas volumes of 2.57 million boed in Brazil, up 1.6% from 2.53 million reported in September.

Petrobras' exclusive oil production in Brazil was 2.10 million barrels per day (bpd) in October, up 2.1% from the previous month. The improvement was driven by the completion of scheduled maintenance activities last month.

Natural gas volumes in Brazil - excluding liquefied volume - totaled 74.7 million cubic meters per day, almost flat from the prior month.

Pre-salt Production Volumes

Petrobras announced that production from the pre-salt region remained over 1 million boed. However, the average volume of 1.005 million boed was 2.3% lower than the prior-month level. Oil production from the region was 809,000 bpd, down 2.3% from the September volume of 828,000 bpd.

Production Outside Brazil

Petrobras stated that it produced 194,000 boed in Oct 2015. This reflects a 3.4% increase from that in the previous month. Contribution from new wells of the Rio Neuquén field in Argentina led to the improvement. Cleaning operations in the export gas pipeline in Akpo field also led to the increase.

Average oil production was up 2.8% from that in September to 99,000 barrels per day. Natural gas production increased about 4% from the previous month to 16.1 million cubic meters per day.

New Discoveries

Petrobras confirmed the discovery of oil in the Pitu area, which lies in the deep waters of Potiguar Basin. The discovery was made through the well Pitu North 1, the first extension well of the Pitu Discovery Evaluation Plan. Petrobras, with its 40% stake, is the operator of the BM-POT-17 concession where the discovery has been made. Other partners include BP plc BP and Petrogal with 40% and 20% stake, respectively.

Zacks Rank and Other Stocks

Currently, Petrobras carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the same industry are China Petroleum & Chemical Corp. SNP and CNOOC Ltd. CEO . While China Petroleum sports a Zacks Rank #1 (Strong Buy), CNOOC has a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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