09/29 Closing prices / revised 09/29/2023 21:30 GMT  |    09/28    OPEC Basket    97.48        +0.40 |    09/29    Mexico Basket (MME)        $87.64       -0.48     06/23  Venezuela Basket (Merey) $57.37  + 1.15 ( from previous month)  (Est. OPEC)  | 09/29    NYMEX WTI Texas Intermediate November  CLX23  $90.79     -0.92  | 09/29    ICE Brent November  BRNX23   $95.31     -0.07  | 09/29    NYMEX Gasoline October  RBV23    $2.22    –2 6%   09/29    NYMEX  Heating Oil  October HOV23   $3.36  +1.3%    |  09/29    Natural Gas November NGX23    $2.93     -0.5%  09/29    Active U.S. Rig Count (Oil & Gas)    623     -7    | 09/29    USD/MXN Mexican Peso   17.4227    Live data  | 09/29      EUR/USD  1.0573 Live data  | 10/02   US/Bs. (Bolivar)      $34.4254000  ( data BCV)    |

Petrobras Investors Balk as Lula Shifts Oil Giant’s Strategy – Bloomberg

  • Lula reverses course to shield consumers from fuel cost swings
  • Shares decline 11% in New York trading, most since late Nov.
Petrobras stock preformance vs peers
Petrobras stock preformance vs peers

Peter Millard, Bloomberg News

EnergiesNet.com 01 04 2022

Brazilian President Luiz Inacio Lula da Silva has pledged to steer the state-controlled oil giant Petrobras in a more populist direction and investors aren’t happy. 

Petroleo Brasileiro SA will shield consumers from sharp fuel price swings and increase investments in refining projects to curb fuel imports, according to initial comments from Lula and his economic team. Petrobras fell 11% in New York Tuesday as investors gauge just how much the policy shift will erode profits and dividends. 

One of Lula’s first executive decisions was to extend a fuel tax holiday, reversing a move by his finance minister to let the tax breaks expire. Petrobras’s incoming chief executive officer, Jean Paul Prates, said the tax break will give Petrobras enough time to review its own pricing policy.

Brazil Will Keep Down Fuel Costs for Now, New Petrobras CEO Says

The move raises the specter of a return to policies that previously drained the oil giant’s account balances. Petrobras spent an estimated $40 billion subsidizing motor fuels the last time Lula’s Workers’ Party was in power, causing it to become the world’s most indebted oil company. After the party was voted out, aggressive cost cuts and asset sales improved the company’s balance sheet. 

Prates supports having Brazil’s government set a national reference price for gasoline and other refined products, which would serve as a guideline for the prices Petrobras charges its customers. While Petrobras is likely to alter its internal formula for setting prices, investors shouldn’t be too frightened, he told reporters in Brasilia on Dec. 30 after his nomination.

Investors also fear Lula’s promise to revamp the refining sector — ostensibly to cut down on costly fuel imports — could further drain the company’s coffers, pointing to Mexico as a cautionary tale. Petroleos Mexicanos has gone billions of dollars over budget at a new facility that was supposed to improve the nation’s fuel making capacity. 

Petrobras would focus on expanding existing facilities, but investors say the money would be better spent on producing oil from giant deepwater fields. 

Read more: Petrobras’ Dividend Cushion Adds Protection Against Lula Stress

Prates will be appointed CEO and a member of the board, the Energy Ministry said in a statement late Tuesday. Itau expects Petrobras to finish electing a new board by the end of February. 

–With assistance from Daniel Carvalho and Mariana Durao.

bloomberg.com 01 03 2023

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com

CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

Scroll to Top