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Petrobras (PBR) to Sell Off Its Fully-Owned Biofuel Unit
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Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) announced plans to sell off its stakes in Petrobras Biocombustivel SA (“PBIO”). Per management, the plan is in sync with its strategy to cut costs and improve capital allocation. The state-run energy giant is the sole owner of this stake and plans to sell 100% operating interest in the project along with a 100% stake held by the unit in three biodiesel plants. However, PBIO’s 50% and 8.4% stakes in the BSBios and Bambui Bioenergia plants, respectively, are not part of the sale.
PBIO, with 580,000 cubic meters of production capacity, is one of Brazil’s largest biodiesel producers. The latest sale offer is part of the company’s strategy to regain its financial footing by selling assets and curtailing debt as it continues to grapple with issues since the start of a major corruption scandal a few years ago when it was charged with accepting bribes from construction firms for awarding them contracts at inflated prices.
In a separate press release, the Brazilian state-run oil firm, Petrobras, announced that it entered the binding phase regarding the sale process of its 10% residual interest in the gas pipeline firm Nova Transportadora do Sudeste SA. Per the company, prospective buyers shortlisted for the phase will receive a process letter with detailed instructions on the divestment process, comprising guidelines for due diligence and the submission of binding proposals.
Petrobras targeted to sell assets worth $20-$30 billion over the next five years under its 2020-2024 investment plan. In early 2020, the company put the Papa-terra deep-water oilfield beside Golfinho and Camarupim fields up for sale. Asset sales are part of its portfolio-optimization strategy and accordingly, it previously put more than 100 mature onshore and shallow-water offshore fields up for auction.
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. The activities also include refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons beside other energy-related operations.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Petrobras (PBR) to Sell Off Its Fully-Owned Biofuel Unit
Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) announced plans to sell off its stakes in Petrobras Biocombustivel SA (“PBIO”). Per management, the plan is in sync with its strategy to cut costs and improve capital allocation. The state-run energy giant is the sole owner of this stake and plans to sell 100% operating interest in the project along with a 100% stake held by the unit in three biodiesel plants. However, PBIO’s 50% and 8.4% stakes in the BSBios and Bambui Bioenergia plants, respectively, are not part of the sale.
PBIO, with 580,000 cubic meters of production capacity, is one of Brazil’s largest biodiesel producers. The latest sale offer is part of the company’s strategy to regain its financial footing by selling assets and curtailing debt as it continues to grapple with issues since the start of a major corruption scandal a few years ago when it was charged with accepting bribes from construction firms for awarding them contracts at inflated prices.
In a separate press release, the Brazilian state-run oil firm, Petrobras, announced that it entered the binding phase regarding the sale process of its 10% residual interest in the gas pipeline firm Nova Transportadora do Sudeste SA. Per the company, prospective buyers shortlisted for the phase will receive a process letter with detailed instructions on the divestment process, comprising guidelines for due diligence and the submission of binding proposals.
Petrobras targeted to sell assets worth $20-$30 billion over the next five years under its 2020-2024 investment plan. In early 2020, the company put the Papa-terra deep-water oilfield beside Golfinho and Camarupim fields up for sale. Asset sales are part of its portfolio-optimization strategy and accordingly, it previously put more than 100 mature onshore and shallow-water offshore fields up for auction.
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. The activities also include refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons beside other energy-related operations.
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) , Devon Energy Corporation (DVN - Free Report) and Antero Resources Corporation (AR - Free Report) , each presently 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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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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