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IEA: Electric Vehicle Sales Are Soaring Globally

IEA: Electric Vehicle Sales Are Soaring Globally

Worldwide sales of electric vehicles…

Petrobras Stock Hits 8-Year Low

On February 3, the stock price for Petroleo Brasileiro SA (Petrobras), Brazil’s flagship oil company, dropped by 5.8% to an eight-year low. Once one of the most valuable companies in the world, Petrobras has suffered from mounting debt and flagging production. Over one-quarter of the company’s value has vanished over the past year as Petrobras has struggled to lift production from its ultra-deepwater fields.

The huge loss in early February was also in part due to the broader sell off in emerging markets, but Petrobras’ troubles extend beyond mere market jitters. The much-hyped pre-salt deposits off the coast of Rio de Janeiro have thus far been a dramatic disappointment. The discoveries a few years ago catapulted Petrobras to new heights, and sparked talks of Brazil’s rise as a world power. Yet the company has been plagued with rising debt and government interference. For example, the state-run company sells fuel at artificially low prices and must use local content in its drilling operations – lowering revenue and increasing costs.

Related article: Shell to Sell Brazilian Oil Field to Qatar for $1bn

Petrobras comes in last in terms of free cash flow out of 113 oil and gas companies, according to Bloomberg. The company posted a $15.4 billion loss over the past year compared with ExxonMobil’s positive free cash flow position of $12.6 billion.

Petrobras hopes to turn things around in the coming years. It expects production and sales to slowly climb later this year, and despite the setbacks in the pre-salt, Petrobras produced a record level 371,000 barrels per day in December 2013. After adding six new platforms in recent months, it may finally reverse a two-year slide in production. Still, according to Bloomberg, the company has $112 billion in debt, and with capital expenditures set at levels higher than revenue, that number will likely climb.

By. Charles Kennedy of Oilprice.com



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