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Will Petrobras (PBR) Suspend its Planned Asset Divestment?

Petrobras PBR, Brazil’s state-owned oil and gas company, has been urged to suspend the sale of its assets citing unfavorable conditions, per media reports. Brazil's president Luiz Inacio Lula da Silva recently halted the sale in his first explicit statement on the matter, alerting Petrobras President Comrade Jean Paul on the same.

Brazil’s Ministry of Mining and Energy requested that the state-controlled company suspend asset sales for 90 days while it reviews its national energy policy. Oil unions, a crucial source of support for Lula, have demanded a halt to asset sales. According to Petrobras, the company has conducted a preliminary investigation and hasn’t found grounds for which the projects for which contracts have already been signed should be suspended.

Signed contracts include the sale of the North Pole Capixaba onshore mature fields in Espirito Santo state for $544 million and the Potiguar onshore fields in Rio Grande do Norte state for $1.38 billion.

FUP, the union representing oil workers responded by calling for a strike on Mar 24.The union will convene meetings on the day of inaction to evaluate the approval of strikes against any attempt to privatize Petrobras’ assets in the Lula government, per media reports.


According to Petrobras, other contracts that have not yet been signed will still be examined. Assets in Colombia, including the Tayrona exploration block and the established Bahia Terra hub, are among the divestitures in the binding phase that are now being discussed with a consortium made up of PetroReconcavao and Eneva. Additionally at the binding stage, are the sales of TSB, a participant in the Parana-Uruguayana pipeline, and TGB, the company that owns and operates the Brazil-Bolivia pipeline.

Zacks Rank & Key Picks

Currently, Petrobras carries a Zack Rank #3 (Hold).You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.

Some better-ranked stocks for investors interested in the energy sector include CVR Energy CVI,Par Pacific Holdings Inc. PARR and Valero Energy Corporation VLO. While CVR Energy and ParPacific Holdings Inc. sport a Zacks Rank #1, Valero Energy Corporation carries a Zacks Rank #2 (Buy).

CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023.

Par Pacific is a growth-oriented company which combines knowledge of corporate financing with experience in the oil and gas sector. With 94,000 bpd of active refining capacity, and a logistical system that includes an SPM, storage, barges, pipelines and trucking operations, PARR owns and manages one of Hawaii's biggest energy networks. Over the past 30 days, PARR has witnessed upward earnings estimate revisions for 2023 and 2024.

Valero Energy is a global manufacturer and marketer of transportation fuels and petrochemical products. With 15 refineries spread across Canada, the United States and United Kingdom, it has a daily refining capacity of 3.1 million barrels. Over the past 30 days, VLO has seen an upward revision in earnings estimates for 2023 and 2024.

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Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report

Valero Energy Corporation (VLO) : Free Stock Analysis Report

CVR Energy Inc. (CVI) : Free Stock Analysis Report

Par Pacific Holdings, Inc. (PARR) : Free Stock Analysis Report

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