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Brazilian integrated energy giant Petroleo Brasileiro S.A. or Petrobras (PBR - Analyst Report) announced that the second well drilled in the Jupiter area of Santos basin also confirmed the presence of natural gas and condensate in the region.
Petrobras drilled the well – 3-BRSA-967A-RJS (3-RJS-683A) – commonly known as Jupiter Nordeste in the ultra-deep waters of block BM-S-24 and at water depth of 7,089.9 feet. The well is 4.6 miles away from the first discovered well in Jupiter acreage and 170.9 miles off the coast of Rio de Janeiro.
The company stated that drilling of the second well is still ongoing and has reached a depth of 17,841.2 feet. Petrobras has identified a 577.4 feet thick oil column in the well that shows excellent permeability and porosity.
Stated-controlled Petrobras, with an 80% interest, acts as the operator of the exploration block, while Petrogal Brasil holds the remaining 20%.
As per the Appraisal Plan approved by the Oil, Natural Gas and Biofuels National Agency, Petrobras along with its partner will consistently conduct activities and investments required for the assessment of the area.
Headquartered in Rio de Janeiro, Petrobras operates in six segments: Exploration and Production, Refining, Transportation and Marketing, Distribution, Gas and Power, and Biofuels and International.
Petrobras – the fourth biggest company by market capitalization after Exxon Mobil Corp. (XOM - Analyst Report), Royal Dutch Shell plc (RDS.A - Analyst Report) and Chevron Corporation (CVX - Analyst Report) – currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. We also maintain a long-term Underperform recommendation on the stock
We remain concerned regarding Petrobras’ exposure to the volatile oil and gas fundamentals, which are expected to impact profitability. Moreover, the company’s huge investment requirements, operational hindrances and international business risks also add to our negative sentiment.
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