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Petrobras' (PBR) Request to Drill at Amazon River Gets Rejected

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Petrobras’ (PBR - Free Report) proposal to drill a well near the mouth of the Amazon River was recently turned down by the Brazilian environmental protection organization, Ibama, per media reports. The idea was rejected based on a technical recommendation from the agency's experts.

A technical report from Ibama had earlier warned against the proposal, citing discrepancies in environmental studies, insufficient procedures for communicating with indigenous communities, and deficiencies in Petrobras' strategy to protect the region's wildlife.

According to Ibama, Petrobras had several chances to address contentious aspects of the project, but it was still exhibiting inconsistencies for the operation in a new exploratory frontier of high socio-environmental vulnerability.

However, Petrobras will now be able to submit a fresh request to drill a well near the mouth of the Amazon River after addressing the discrepancies in the first one. The company has been working on setting up a new exploration front on the coast of Amapa state in northern Brazil, close to Guyana.

Zacks Rank & Key Picks

Currently, Petrobras carries a Zack Rank #3 (Hold).

Some better-ranked players for investors interested in the energy sector include Sunoco LP (SUN - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Dril-Quip, Inc. (DRQ - Free Report) . While Sunoco sports a Zacks Rank #1 (Strong Buy), both Murphy USA and Dril-Quip carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco, which distributes motor fuel to approximately 10,000 convenience stores, has a stable business model with sustainable and predictable cash flows. SUN has witnessed an upward earnings estimate revision for 2023 in the past 30 days.

Murphy USA is a leading retailer of gasoline, operates stations close to Walmart supercenters and sells low-cost, high-volume fuel. MUSA has more than 1,700 stores. It witnessed an upward earnings estimate revision for 2024 in the past seven days.

Dril-Quip is a leading provider of highly engineered equipment, service and innovative technologies that are being employed in the energy sector. DRQ’s balance sheet has zero debt, highlighting a sound financial position.


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