The stock of Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) closed at $10.84 losing 0.64% in yesterday’s trading session. In a bid to cut down on its debt, this company intends sell stake in Nigeria JV. Tanzania, Angola and Gabon are the other three countries where the Petrobras operates in.
Petrobras revealed that JV had stakes in Agbami fields and Nigeria’s Akpo. It is here that it conducts its exploration and production operations. The Preowei field and Egina field ‘s exploration and production rights are part of the divestment program. If everything moves according to plan, by 2018 production is expected to have started from the Egina field. The Preowei field is currently at the assessment phase
JV takes great pride in the fact that it has liquid reserves of about 204 million barrels and on a daily basis it is able to produce approximately 48,000 barrels. The company has been looking forward to reduce its debt by a huge margin and it sees the sale of the stakes as progressive move.
The company’s spokesperson opined, “It carries a net debt of almost $89.2 billion with net debt-to-capitalization ratio of approximately 53%. The divestment will keep the company’s strategy of offloading $21 billion worth of assets through 2018 on track.”
Petrobras as one of the biggest integrated energy firms globally has used its bases in Latin America and Rio de Janeiro to promote its business operations. One of the strategic planners working for the company attested to the fact that exploration, exploitation and production of oil from reservoir wells is always met with numerous challenges. He said that as a company they focused on the adoption of top production strategies and high end technology to move past the challenges and maintain business relevance.
The past six months ended Jun 30, 2017 have witnessed Petrobras’ expenditures and investments total to about $7,230 million. That is almost 7% lower when put in comparison to last year’s $7,814 million.
Top financial experts have advised the company to push for the successful completion of its cost control program since that will help boost its financials.