Petroleo Brasileiro S.A. or Petrobras ( PBR Quick Quote PBR - Free Report) recently announced that it churned out record oil and total output in 2020 with oil production recorded at 2.28 million barrels per day (bpd) and overall production amounting to 2.84 million bpd. This surpassed the previous record that was achieved in 2015 when Petrobras produced 2.23 million barrels of oil per day and 2.79 million barrels of oil equivalent daily. Even though the oil industry is rebounding from the pandemic lows, it is reeling under the adverse impact of COVID-19 that jeopardized growth in most sectors. For instance, fuel demand took a huge hit last year following large-scale travel constraints imposed globally. Despite such challenging market conditions, this Rio de Janeiro-based company was able to produce record fuel in 2020 with primary focus on world-class assets in deep and ultra-deep waters where it gained an impressive competitive edge from its greater production efficiency. High-yielding asset portfolios aided the production record in 2020. Notably, pre-salt production in the period came in at 1.86 million barrels of oil equivalent per day, signifying 66% of the company’s total production. Solid volumes are also attributable to remarkable production at the Buzios pre-salt field as a result of lower-than-anticipated production losses owing to strong maintenance and an improved performance of reservoirs in the Tupi and Sapinhoa pre-salt fields. Last November, Petrobras lowered its capital spending guidance for the next five years in response to the coronavirus-induced weak market scenario. The company trimmed its five-year capex view to $55 billion, indicating a 27% decline from the year-ago five-year capital budget forecast. As the company focuses on regaining its financial footing by selling assets and curtailing debt load, it assumes its gross debt to be $67 billion for 2021 and intends to reduce the same to $60 billion in 2022. Coronavirus-induced tepid demand and increased asset sales imply a short-term decline in the company’s production. Petrobras projects 2021 daily overall output at 2.75 million barrels of oil equivalent per day, lower than 2.84 million barrels of oil equivalent per day in 2020. Company Profile Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons in addition to other energy-related activities. Zacks Rank & Key Picks Petrobras currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the space are energy DCP Midstream Partners, LP ( DCP Quick Quote DCP - Free Report) , Plains Group Holdings, L.P. ( PAGP Quick Quote PAGP - Free Report) and Altus Midstream Company ( ALTM Quick Quote ALTM - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here . More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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