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Petrobras (PBR) Cuts Production Forecasts for 2022 and Beyond

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Brazilian state-owned energy company, Petrobras (PBR - Free Report) , has reduced its 2022-26 production targets.

For 2022, the Latin American oil major expects to churn out about 2.6 million barrels of oil equivalent per day (boed), down from its initial forecast of 2.7 million boed in November 2021. However, for the 2023-26 period, the company slashed its output estimates by a mean of 100,000 boed. The lowering of the outlook is in the wake of Petrobras entering into production-sharing agreements involving the Atapu and Sepia fields.

The co-participation deals are expected to take effect from May 1. As part of the production sharing of the Atapu reservoir, Petrobras will have about 66% share of the output, with the remainder divided between Anglo-Dutch energy major, Shell; France’s TotalEnergies, Portugal's Galp Energia and Brazil government-owned, Pre-Sal Petroleo SA. Meanwhile, from the Sepia reservoir, Petrobras will have about 55% share of the output, TotalEnergies, Qatar Petroleum, Petronas and Galp will receive the remaining volumes.

Petrobras further informed that it pumped 2.77 million boed in 2021, slightly ahead of its projection of 2.72 million boed. Of the total output, 1.95 million boed (or approximately 70%) came from PBR’s prolific offshore pre-salt reserves.

Headquartered in Rio de Janeiro, Petroleo Brasileiro S.A. or Petrobras S.A. is the largest integrated energy firm in Brazil and one of the largest 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.

Petrobras currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy sector include TotalEnergies (TTE - Free Report) , Murphy USA (MUSA - Free Report) and REX American Resources (REX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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