{"id":26889,"date":"2012-01-26T11:26:00","date_gmt":"2012-01-26T16:26:00","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2012\/01\/26\/petrobras-the-real-winner-from-brazil%e2%80%99s-offshore-oil-boom\/"},"modified":"2012-01-26T11:26:00","modified_gmt":"2012-01-26T16:26:00","slug":"petrobras-the-real-winner-from-brazils-offshore-oil-boom","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2012\/01\/26\/petrobras-the-real-winner-from-brazils-offshore-oil-boom\/","title":{"rendered":"Petrobras: The Real Winner From Brazil\u2019s Offshore Oil Boom"},"content":{"rendered":"

Petrobras: The Real Winner From Brazil\u2019s Offshore Oil Boom<\/a><\/h1>\n

by Mike Kapsch<\/a>, Investment U<\/em> Research
\nThursday, January 26, 2012<\/p>\n

Several miles off the coast of Rio de Janeiro, as much as $5 trillion in untapped crude oil is sitting under Brazil\u2019s pre-salt fields.<\/p>\n

Investment U\u2019s<\/em> Jason Jenkins stated last December<\/a> that this massive find could make Brazil one of the world\u2019s top five oil-producing nations in just the next few years.<\/p>\n

Dan Bartfeld, a well-known project finance partner at Milbank, Tweed, Hadley & McCloy, says, \u201cBrazil will continue to provide a huge amount of opportunities for industry in 2012.\u201d<\/p>\n

Energy firms from all over of the globe desperately want in on a piece of the action.<\/p>\n

Yet one oil and gas company \u2013 Anadarko Petroleum<\/strong> (NYSE: APC<\/a>) \u2013 is looking to cut ties entirely from the one million acres it owns in Brazil\u2019s pristine pre-salt fields.<\/p>\n

And it raises the question, why?<\/p>\n

The Truth Behind Brazil\u2019s Pre-Salt Reserves<\/strong><\/p>\n

Anadarko Petroleum is widely known today for its involvement in the 2010 oil spill<\/a> in the Gulf of Mexico.<\/p>\n

It owned 25% of the Macondo well that dumped five million barrels of oil into the sea and claimed the lives of 11 workers.<\/p>\n

Last October, Anadarko reached a $4-billion settlement with BP<\/strong> (NYSE: BP<\/a>) over the tragic spill. The attempted sale of its Brazilian pre-salt acreage is undoubtedly to help pay off its debt.<\/p>\n

But Anadarko owns energy projects all over the world. In Brazil, it has multiple deep-water prospects near already existing oil discoveries.<\/p>\n

Why would it want to abandon its efforts there with so much oil to be produced in the near future?<\/p>\n

The answer is more than likely Petroleo Brasileiro<\/strong> (NYSE: PBR<\/a>), or Petrobras<\/a>.<\/p>\n

Brazil\u2019s State-Owned Pre-Salt Cash Machine<\/strong><\/p>\n

Recent regulations by Brazil\u2019s government have given Petrobras a huge advantage<\/a> over other companies looking to profit in the pre-salt oil fields.<\/p>\n

Brazil now requires production-sharing agreements for all future production in the region to go through Petrobras.<\/p>\n

More specifically, Brazil\u2019s largest oil company can claim 30% of any project regarding the pre-salt fields. It will also lead all future operations in the region.<\/p>\n

It\u2019s no surprise Petrobras is getting such royal treatment. After all, it was created by the Brazilian government and is a partially state-owned company today. Brazil simply wants to keep as much profit as possible at home (as well as do everything it can to prevent another offshore oil spill catastrophe).<\/p>\n

Yet shareholders aren\u2019t too keen on Brazil\u2019s aggressive stance.<\/p>\n

Over the past year, Petrobras\u2019 shares have fallen 22%.<\/p>\n

But this looks way overblown…<\/p>\n

A Final Word<\/strong><\/p>\n

When it comes down to it, as much as 50 billion barrels of oil will be produced from Brazil\u2019s pre-salt fields over the next decade. Petrobras will be first in line to cash in as these developments take shape. And trillions of dollars are at stake.<\/p>\n

Good Investing,<\/p>\n

Mike Kapsch<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Petrobras: The Real Winner From Brazil\u2019s Offshore Oil Boom by Mike Kapsch, Investment U Research Thursday, January 26, 2012 Several miles off the coast of Rio de Janeiro, as much as $5 trillion in untapped crude oil is sitting under Brazil\u2019s pre-salt fields. Investment U\u2019s Jason Jenkins stated last December that this massive find could … <\/p>\n

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