Petrobras CEO: Share value drop mirrors oil prices
August 16th, 2008 | by admin |RIO DE JANEIRO, Aug 15 (Reuters) - The drop in share priceof Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz)(PBR.N: Quote, Profile, Research, Stock Buzz), Brazil’s state-run oil company,reflects the softening world oil prices rather than investorconcerns of talk of a new rival state oil firm, the companypresident said on Friday.
Petrobras shares on the Sao Paulo Stock Exchange .BVSPreached an all-time high of 53.68 reais on June 25 but havefallen back almost 40 percent to 32.66 reais in intraday tradeon Friday.
New York oil futures CLc1 have dropped 24 percent from ahigh of $147.27 a barrel on July 11 to $111.86 in trade onFriday.
“I believe that the fall in market value is associated withthe price of oil, just as Shell prices, and as all the oilcompanies in the world fell,” Jose Sergio Gabrielli, Petrobras’president, said at a news conference.
Gabrielli dismissed the suggestion that talks in thegovernment about the creation of a new state oil company werethe cause of the drop in share price.
In December, Petrobras registered the world’s largestdeepwater oil discovery of up to 8 billion barrels of light oiland gas in the Tupi field, which makes up part of a largesubsalt band that has shown impressive deposits of oil.
Brazil is considering revising its Petroleum Law toincrease the government’s take in the potentially rich subsaltband and one of the proposals is for the creation of a rivalstate-run oil company that would manage future subsalt blocksthat have not been auctioned off yet.
About 20-25 percent of the subsalt blocks are already inthe hands of Petrobras and partners including Galp GALP.LS,ExxonMobil Corp <XOM.N, Amerada Hess (HES.N: Quote, Profile, Research, Stock Buzz), BG Group, Repsol(REP.MC: Quote, Profile, Research, Stock Buzz) and Shell (RDSa.L: Quote, Profile, Research, Stock Buzz).
President Luiz Inacio Lula da Silva as well as EnergyMinister Edison Lobao seem to favor imitating a productionsharing model that Norway used to develop North Sea oilfields.
