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Petrobras' May Fuel Export Creates Milestone Despite Coronavirus

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PetroleoBrasileiroS.A., or Petrobras (PBR - Free Report) announced that it exported 1.11 million tons of fuel oil in May 2020, skyrocketing 231% from the volume exported in the same month of 2019. Moreover, this export figure reflects a 10% rise from the preceding record set in February this year, before the coronavirus pandemic triggered suspension of activities around the world.

The oil industry is reeling under the adverse impact of COVID-19 that jeopardized growth in most sectors. For instance, fuel demand took a huge hit following large-scale travel constraints imposed globally. Despite such challenging market conditions, this Rio de Janeiro-based company was able to produce record fuel exports, last month.

To some extent, Petrobras’ enforcement of new global specifications for marine fuels that lowered the limit of sulfur content in crude oil from 3.5% to 0.5% was responsible for its improved market share, globally.

In a separate press release, this Brazilian state-run energy giant informed that the divestment procedure of its stakes in five power plants in the Latin American country is already on track. Those are, namely BrasympeEnergia SA, EnergéticaSuape II SA, TermoelétricaPotiguar SA, CompanhiaEnergéticaManauara SA and BrentechEnergia SA.

Petrobras looks forward to sell 20-40% interest in the power plants installed across four states, generating natural gas and hydroelectricity with a complete capacity of almost 700 megawatt.

With these divestitures, the company plans to reduce its debt load and concentrate its investment and development efforts on the pre-salt area offshore Rio de Janeiro and São Paulo states.

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 stocks in the energy space are Gulfport Energy Corporation (GPOR - Free Report) , Halliburton Company (HAL - Free Report) and Cheniere Energy, Inc. (LNG - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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