Petroleo Brasileiro SA Petrobras Will Not Sell Stakes In Libra Offshore Oilfield

Petroleo Brasileiro SA Petrobras Will Not Sell Stakes In Libra Offshore Oilfield

Despite a low crude environment, many oil giants are looking to up their stake in Libra offshore oil field. Here’s why Petrobras should not give up its stake

According to sources, it is believed that Petroleo Brasileiro SA Petrobras (ADR) it is not considering to sell its stakes in Libra offshore oil field anymore. The company officially announced on Friday that it has put this decision on hold for the time being. Reuters was the first to report this news and was quite surprised with this decision as many oil and gas companies in the market are considering to sell their stakes in Libra offshore oil field due to ‘low crude environment’. But Petrobras now has no intentions to follow their footsteps.

When the news became public, the company was active in replying to all of them that it had various offers from big name investors regarding the oil field. Libra offshore oil field is indeed a big project and it attracts investors who are willing to spend in such markets. The companies have to back off due to declining businesses. It is believed that at its optimum potential, the project can easily produce 10 to 12 billion barrels of crude oil and gas in a day. And this heavy production can easily meet the crude oil demands of the United States for the next 20 months.

Crude oil prices are currently at its lowest degree and many companies have already sold their stakes. Regardless of this, analysts believe that if Petrobras choose to sell its 10% stake in Libra offshore oil field then it will easily attract buyers for the oil field.

In the past year, the shares of the company easily lost 50% of its value and are now trading at a very low price of $4.48.

The company is currently looking for other options such as selling its division etc. in order to revive its business. Out of $134 billion in debts and liabilities, $24 billion are due next year to be repaid. Aldemir Bendine who is the CEO of Petrobras told the Brazilian Congress that his company will not be able to pay such high debts by the given time. Furthermore, it might even fail to invest in future oil and gas project if it fails to meet its asset divestiture goals for next year. In a nutshell, the company is in a very critical stage at this moment.

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