We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Petrobras (PBR) to Boost Oil Production Amid Climate Concerns
Read MoreHide Full Article
Petróleo Brasileiro S.A. – Petrobras (PBR - Free Report) has been in the news recently for its bold decision to ramp up oil production despite pressure from climate change activists and rising concerns over the future of the oil industry. The CEO of Brazil's state-owned oil company, Jean Paul Prates, believes that they should continue to increase fossil fuel production for several decades despite the global energy transition.
According to a recent report, Petrobras plans to increase its oil production to 2.7 million barrels per day (mb/d) by 2025, up from the current level of 2.2 mb/d. This move has raised eyebrows among environmentalists, who have been calling for a reduction in fossil fuel production to combat climate change.
Petrobras, however, seems unfazed by these concerns and has vowed to continue investing in oil exploration and production. In fact, the company has been actively seeking new oil fields in Brazil and abroad, including Africa and the Gulf of Mexico.
The global oil industry has been going through a rough patch in recent years. The COVID-19 pandemic led to a significant drop in oil demand, as travel and transportation were restricted. As a result, oil prices fell, forcing many oil companies to halt production and lay off workers.
Furthermore, the world is shifting toward renewable energy sources, such as solar, wind and hydropower. Governments around the world are also implementing policies to reduce carbon emissions and combat climate change. These trends have led to a decline in demand for oil and an increase in demand for alternative energy sources.
Brazil is expected to produce 3.4 million barrels of crude oil per day in 2023, with further growth projected until 2030. However, investments will be necessary in order to maintain these levels.
Why is Petrobras so Bent on Increasing Oil Production?
One reason could be the sheer size of Petrobras and its significant role in the Brazilian economy. The company contributes around 10% to Brazil's GDP and has more than 45,000 employees. Any significant reduction in oil production could have a severe impact on the country's economy and its people.
Another reason could be the current state of the oil industry that was affected by low prices and falling demand during the pandemic. Many smaller oil companies were forced to reduce production or even shut down entirely. However, Petrobras, with its size and resources, managed to weather the storm and emerge stronger.
The company’s strategy is not without risks. It could face significant backlash from environmental groups and investors who are increasingly demanding a shift toward clean energy. Additionally, the future of the oil industry is uncertain, and Petrobras could find itself struggling if the demand for fossil fuels continues to decline.
Despite the challenges, PBR still believes that there will be a demand for oil in the future. According to the International Energy Agency, global oil demand is expected to grow at an average annual rate of 0.5% until 2026. However, the growth rate is expected to slow down after 2026, due to the increasing use of electric vehicles and the implementation of carbon emission reduction policies.
In conclusion, Petrobras' decision to ramp up oil production amid increasing pressure from environmentalists and the uncertain future of the oil industry is a bold move. Let us wait and see if this move pays off in the long run.
Petrobras, headquartered in Rio de Janeiro, is a globally renowned Brazilian oil and gas company. It engages in various energy-related activities such as oil exploration, production, refining, trading, and transportation of oil, natural gas and other fluid hydrocarbons.
Zacks Rank and Key Picks
Currently, Petrobras carries a Zacks Rank #3 (Hold). Investors interested in the energy sector might look at some better-ranked stocks like NGL Energy Partners (NGL - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Energy Transfer (ET - Free Report) and Helix Energy Solutions Group (HLX - Free Report) , each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NGL Energy Partners: The company is worth approximately $328.30 million. Its shares have increased 10.1% in the past year.
NGL is a limited partnership company that operates a vertically-integrated propane business with three segments — retail propane, wholesale supply and marketing, and midstream.
Energy Transfer LP: The company is valued at around $36.21 billion. It delivered an average earnings surprise of 11.43% for the last four quarters and its current dividend yield is 10.43%.
ET currently has a forward P/E ratio of 8.20. In comparison, its industry has an average forward P/E of 9, which means the company is trading at a discount to the group.
Helix Energy Solutions Group: The company is valued at around $1.20 billion. In the past year, the stock has increased 63.3%.
HLX currently has a forward P/E ratio of 12.02. In comparison, its industry has an average forward P/E of 12.50, which means the company is trading at a discount to the group.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Petrobras (PBR) to Boost Oil Production Amid Climate Concerns
Petróleo Brasileiro S.A. – Petrobras (PBR - Free Report) has been in the news recently for its bold decision to ramp up oil production despite pressure from climate change activists and rising concerns over the future of the oil industry. The CEO of Brazil's state-owned oil company, Jean Paul Prates, believes that they should continue to increase fossil fuel production for several decades despite the global energy transition.
According to a recent report, Petrobras plans to increase its oil production to 2.7 million barrels per day (mb/d) by 2025, up from the current level of 2.2 mb/d. This move has raised eyebrows among environmentalists, who have been calling for a reduction in fossil fuel production to combat climate change.
Petrobras, however, seems unfazed by these concerns and has vowed to continue investing in oil exploration and production. In fact, the company has been actively seeking new oil fields in Brazil and abroad, including Africa and the Gulf of Mexico.
The global oil industry has been going through a rough patch in recent years. The COVID-19 pandemic led to a significant drop in oil demand, as travel and transportation were restricted. As a result, oil prices fell, forcing many oil companies to halt production and lay off workers.
Furthermore, the world is shifting toward renewable energy sources, such as solar, wind and hydropower. Governments around the world are also implementing policies to reduce carbon emissions and combat climate change. These trends have led to a decline in demand for oil and an increase in demand for alternative energy sources.
Brazil is expected to produce 3.4 million barrels of crude oil per day in 2023, with further growth projected until 2030. However, investments will be necessary in order to maintain these levels.
Why is Petrobras so Bent on Increasing Oil Production?
One reason could be the sheer size of Petrobras and its significant role in the Brazilian economy. The company contributes around 10% to Brazil's GDP and has more than 45,000 employees. Any significant reduction in oil production could have a severe impact on the country's economy and its people.
Another reason could be the current state of the oil industry that was affected by low prices and falling demand during the pandemic. Many smaller oil companies were forced to reduce production or even shut down entirely. However, Petrobras, with its size and resources, managed to weather the storm and emerge stronger.
The company’s strategy is not without risks. It could face significant backlash from environmental groups and investors who are increasingly demanding a shift toward clean energy. Additionally, the future of the oil industry is uncertain, and Petrobras could find itself struggling if the demand for fossil fuels continues to decline.
Despite the challenges, PBR still believes that there will be a demand for oil in the future. According to the International Energy Agency, global oil demand is expected to grow at an average annual rate of 0.5% until 2026. However, the growth rate is expected to slow down after 2026, due to the increasing use of electric vehicles and the implementation of carbon emission reduction policies.
In conclusion, Petrobras' decision to ramp up oil production amid increasing pressure from environmentalists and the uncertain future of the oil industry is a bold move. Let us wait and see if this move pays off in the long run.
Petrobras, headquartered in Rio de Janeiro, is a globally renowned Brazilian oil and gas company. It engages in various energy-related activities such as oil exploration, production, refining, trading, and transportation of oil, natural gas and other fluid hydrocarbons.
Zacks Rank and Key Picks
Currently, Petrobras carries a Zacks Rank #3 (Hold). Investors interested in the energy sector might look at some better-ranked stocks like NGL Energy Partners (NGL - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Energy Transfer (ET - Free Report) and Helix Energy Solutions Group (HLX - Free Report) , each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NGL Energy Partners: The company is worth approximately $328.30 million. Its shares have increased 10.1% in the past year.
NGL is a limited partnership company that operates a vertically-integrated propane business with three segments — retail propane, wholesale supply and marketing, and midstream.
Energy Transfer LP: The company is valued at around $36.21 billion. It delivered an average earnings surprise of 11.43% for the last four quarters and its current dividend yield is 10.43%.
ET currently has a forward P/E ratio of 8.20. In comparison, its industry has an average forward P/E of 9, which means the company is trading at a discount to the group.
Helix Energy Solutions Group: The company is valued at around $1.20 billion. In the past year, the stock has increased 63.3%.
HLX currently has a forward P/E ratio of 12.02. In comparison, its industry has an average forward P/E of 12.50, which means the company is trading at a discount to the group.