Petróleo Brasileiro S.A. or Petrobras (PBR - Free Report) recently announced that the company has signed a Letter of Intent with China National Petroleum Corporation or CNPC – the state-owned parent of PetroChina Company Limited (PTR - Free Report) – regarding a partnership focused on reviving a refining facility in Itaboraí, in the state of Rio de Janeiro.
The agreement is eyeing the completion of the Comperj refinery, located near Rio de Janeiro. Per Reuters, Petrobras already invested $13 billion in the project and requires $3 billion more in order to reach 165 thousand barrels per day of capacity. Notably, finalization of the deal will provide CNPC with its first refining facility in the continent. Moreover, CNPC intends to participate in the offshore Marlim oil field located in the Campos Basin, which Petrobras had publicized with the discovery of a 196-meter oil column.
The partnership is in line with Petrobras’ strategy of revitalizing its Eastern refinery and logistics park. Moreover, it will bring in foreign investments to the Brazilian energy sector. The move from both the state-run companies can enhance ties between the two countries.
Partnership between the two companies is not new as these have already worked together in 2013 for Santos Basin’s giant Libra field. Moreover, the companies won exploration rights for the Peroba Block in the pre-salt area last year. The companies also have BP p.l.c. (BP - Free Report) as partner in the project, in which Petrobras is the operator.
Headquartered in Rio de Janeiro, Petrobras has gained 33.6% in the past year compared with 34.2% growth of its industry.
Zacks Rank and A Stock to Consider
Currently, Petrobras has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for a better-ranked stock like Delek US Holdings, Inc. (DK - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Brentwood, TN-based Delek is an energy company. The company’s top line for 2018 is anticipated to improve 39.3% year over year, while its bottom line is expected to increase more than 300%.
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