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Petrobras to Expand in Africa to Tap Global Energy Resources
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Petrobras S.A. (PBR - Free Report) , Brazil’s state-owned energy company, is planning to shift its focus to Africa via a new expansion strategy, where the company seeks to acquire shares of major oil players like Exxon Mobil Corporation, Shell plc, TotalEnergies SE and Equinor ASA in their African oil exploration blocks. With geological ties and strategic partnerships, Africa is key to its future growth.
Although the company is keen on maintaining its focus in Brazil, the requirement to renew its oil reserves for the future compels it to take a global shift.
Petrobras Enters New Markets in Namibia, South Africa and Angola
Petrobras is studying the feasibility of 10 opportunities extended to it with major oil companies in Africa. The company is quite optimistic about GalpEnergia’s Mopane oil and gas field in Namibia as the field is considered to be highly potential and is also under negotiations to become the operator by acquiring 40% of its stake. Along with this, the company is also under discussions over oil blocks in South Africa and Angola. Recently, Petrobras has acquired minority stakes in three of Shell’s oil blocks in Sao Tome and Principe.
Reasons Behind PBR’s Choice of Africa
A geological similarity between Africa and Brazil with comparable oil-rich basins in both the countries is one of the major reasons behind Petrobras’ interest in Africa. Southern Africa’s Namibia is said to have similar geology as Guyana where a big oil discovery changed the nation’s economy and is also believed to be prospective hotspot for oil exploration.
Petrobras’ Shift From Domestic Market
The pre-salt deep-water fields off Brazil’s coast have always been Petrobras’ point of focus, but in recent years, the company has been struggling with slowing domestic exploration. PBR is facing difficulties in obtaining environmental licenses to drill for oil in the promising Equatorial Margin–a region located in the north of the country that stretches from Amapá to Rio Grande do Norte. Therefore, in order to renew its oil reserves for the future, the company has accelerated its African expansion.
Petrobras is planning to partner with ExxonMobil, Shell, TotalEnergies and Equinor to speed up its oil exploration and production.
PBR’s Five-Year Plan to be Used for Expansion
The Expansion plan would be funded from the $11 billion that the company had set aside for acquisitions under the $102 billion spending plan. Under its $102 billion five-year spending plan, the company is well positioned to undertake the expansion plans and enter into partnerships with the big oil giants.
PBR’s Zacks Rank and Key Picks
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America.Currently, PBR has a Zacks Rank #4 (Sell).
Royal Vopak NV is a tank terminal operator. The company is engaged in the storage and handling of oil products, liquid chemicals, gases, biofuels and vegetable oils. The Zacks Consensus Estimate for VOPKY's 2024 earnings indicates 2.5% year-over-year growth.
VAALCO ENERGY is an independent energy company engaged in the acquisition, exploration, development and production of crude oil and natural gas. The Zacks Consensus Estimate for EGY’s 2024 earnings indicates 4.8% year-over-year growth.
Founded in 1936, Amsterdam, Netherlands-based Core Labs Inc. is an oilfield services company operating in more than 50 countries. CLB’s expected EPS growth rate for three to five years is currently 22.2%, which compares favorably with the industry's growth rate of 14.5%.
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Petrobras to Expand in Africa to Tap Global Energy Resources
Petrobras S.A. (PBR - Free Report) , Brazil’s state-owned energy company, is planning to shift its focus to Africa via a new expansion strategy, where the company seeks to acquire shares of major oil players like Exxon Mobil Corporation, Shell plc, TotalEnergies SE and Equinor ASA in their African oil exploration blocks. With geological ties and strategic partnerships, Africa is key to its future growth.
Although the company is keen on maintaining its focus in Brazil, the requirement to renew its oil reserves for the future compels it to take a global shift.
Petrobras Enters New Markets in Namibia, South Africa and Angola
Petrobras is studying the feasibility of 10 opportunities extended to it with major oil companies in Africa. The company is quite optimistic about GalpEnergia’s Mopane oil and gas field in Namibia as the field is considered to be highly potential and is also under negotiations to become the operator by acquiring 40% of its stake. Along with this, the company is also under discussions over oil blocks in South Africa and Angola. Recently, Petrobras has acquired minority stakes in three of Shell’s oil blocks in Sao Tome and Principe.
Reasons Behind PBR’s Choice of Africa
A geological similarity between Africa and Brazil with comparable oil-rich basins in both the countries is one of the major reasons behind Petrobras’ interest in Africa. Southern Africa’s Namibia is said to have similar geology as Guyana where a big oil discovery changed the nation’s economy and is also believed to be prospective hotspot for oil exploration.
Petrobras’ Shift From Domestic Market
The pre-salt deep-water fields off Brazil’s coast have always been Petrobras’ point of focus, but in recent years, the company has been struggling with slowing domestic exploration. PBR is facing difficulties in obtaining environmental licenses to drill for oil in the promising Equatorial Margin–a region located in the north of the country that stretches from Amapá to Rio Grande do Norte. Therefore, in order to renew its oil reserves for the future, the company has accelerated its African expansion.
Petrobras is planning to partner with ExxonMobil, Shell, TotalEnergies and Equinor to speed up its oil exploration and production.
PBR’s Five-Year Plan to be Used for Expansion
The Expansion plan would be funded from the $11 billion that the company had set aside for acquisitions under the $102 billion spending plan. Under its $102 billion five-year spending plan, the company is well positioned to undertake the expansion plans and enter into partnerships with the big oil giants.
PBR’s Zacks Rank and Key Picks
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America.Currently, PBR has a Zacks Rank #4 (Sell).
Investors interested in the energy sector might look at some better-ranked stocks like Royal Vopak(VOPKY - Free Report) , VAALCO Energy (EGY - Free Report) and Core Labs Inc. (CLB - Free Report) . While Royal Vopak currently sports a Zacks Rank #1 (Strong Buy), VAALCO Energy and Core Labs Inc. carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royal Vopak NV is a tank terminal operator. The company is engaged in the storage and handling of oil products, liquid chemicals, gases, biofuels and vegetable oils. The Zacks Consensus Estimate for VOPKY's 2024 earnings indicates 2.5% year-over-year growth.
VAALCO ENERGY is an independent energy company engaged in the acquisition, exploration, development and production of crude oil and natural gas. The Zacks Consensus Estimate for EGY’s 2024 earnings indicates 4.8% year-over-year growth.
Founded in 1936, Amsterdam, Netherlands-based Core Labs Inc. is an oilfield services company operating in more than 50 countries. CLB’s expected EPS growth rate for three to five years is currently 22.2%, which compares favorably with the industry's growth rate of 14.5%.