Petrobras Brings Good News

Yesterday, Petrobras (PBR - Analyst Report) announced the finding of a new oil field, named BM-S-3, in the Santos Basin. This new block is close to the field BM-S-7, which Petrobras and Repsol YPF S.A. (REP - Analyst Report) recently declared commercial feasibility. Even better, this new field is 100% owned by Petrobras. Even though there is just the indication of hydrocarbons, more information will depend on further tests to be carried on in the following months.

Additionally, Brazilian President Lula is in China this week, and Brazilian papers have announced that a credit line in the amount of US$10 billion from the development Bank of China to Petrobras is to be announced in the following hours. Petrobras has a huge investment program going on, focused on the development of the Tupi field in the Santos Basin, one of the most promising oil field in the world nowadays.

China has already demonstrated interest in participating in this development, and Petrobras is in need of diversification of its financial sources as international credit markets remain difficult. After the good news on Petrobras, we reinforce our positive view on the company.