Petrobras: Drilling in Troubled Waters?

<< Previous

Excerpts

From the 1980s, Petrobras continuously increased its oil production. The production level in the 1980s was almost negligible but by 2008 it was pumping 1.97 million barrels of crude oil per day, which placed it among the ten largest energy companies in the world. The huge oil discoveries in 2007 in the pre-salt basins made experts view Brazil as a huge lottery ticket which could become a superpower in the coming few years. With the discovery, Petrobras, being the largest oil producer in the country, was said to be worth more than Microsoft during that time.

or or PayPal (9 USD)

Foster was known as “The Iron Lady of Oil” in her home country. Her dedication and hard work served as a source of inspiration for many. Marcio Mello, the CEO of Brazilian oil explorer Participacoes em Petroleo SA, who had worked with Foster for 18 years, said “She’s a kind of person you give a mission and she will deliver above expectations”. Petrobras employees pointed out that Foster had been working in the company for more than 30 years, and that she was one among them and was well aware of what needed to be done..........

In 2013, Brazil averaged only 2.7 million bpd, the same figure as it had recorded three years earlier . With the fall in the GDP growth rate to 0.9 % in 2012, Petrobras’s performance was bound to be affected but the reasons for stagnation at the company were deep and had been accumulating over a long period of time. Its debt of $114 billion was one of the highest in the world . In 2012, the corporate spending was revised to $237 billion in the pre-salt area by 2018 . “The decline of Petrobras has been stunning, swift, and painful. .......

Exhibit I:Pre-Salt Layer
Exhibit II: Brazilian Economy
Exhibit III:Petrobras - Income Statement
Exhibit IV:Average Oil Production at Petrobras
Exhibit V:Petrobras - Balance Sheet
Exhibit VI:Petrobras – Stock Price Chart