It was just a week ago when we heard about oil stock Petrobras (NYSE:PBR) and the lack of trouble it was getting out of the Brazilian government over gas prices. It turns out that Petrobras isn’t just getting a lack of trouble from the Brazilian government but also a little help. That was enough to send Petrobras stock up over 7% in Wednesday afternoon’s trading.
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The newest word from the Brazilian attorney general’s office notes that it actually could step in to help Petrobras expand its exploratory operations around the mouth of the Amazon River. Specifically, the Foz do Amazonas basin. Some believed that the country’s environmental agency, Ibama, would have to step in to perform a major impact study first. The attorney general’s office, meanwhile, believes quite the opposite: no such study is required.
This, in turn, sent the entire matter to a “mediation chamber” to reconcile the various government agencies involved, which Petrobras noted it would be more than happy to join in on to help reach a satisfactory conclusion. Meanwhile, Petrobras executives—particularly the Chief Exploration and Production Officer, Joelson Mendes—noted that Petrobras will likely continue to produce oil for “the next four decades,” even as it seeks to step up involvement in renewable resources. This is about the only way things can be handled; renewables are vital, certainly, but we’ve got to get there first.
Meanwhile, analysts are somewhat split on Petrobras’ overall future. Currently, Petrobras is considered a Moderate Buy, supported by three Buy ratings and four Holds. Further, with an average price target of $14.87, Petrobras only offers a scant 2.73% upside potential.
