Why Petrobras expanded its international operations

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Nov. 20 2020, Updated 3:32 p.m. ET

International operations

Outside Brazil, Petrobras’ (PBR) operations are based in other Latin American countries including Argentina, Bolivia, Chile, and Columbia. PBR also has operations in African nations like Angola and Nigeria. It has operations in the Gulf of Mexico in the U.S.

Petrobras wants to mainly focus on deepwater drilling production in these countries. According to PBR’s 2013 annual report, the following projects were active.

In 2013, PBR produced ~128 thousand barrels of oil per day (or bbl/d) of crude oil and natural gas liquids (or NGLs). It produced ~560 million cubic feet per day (or MMcf/d) of natural gas outside Brazil. This represented ~9% of PBR’s total production.

In comparison, PBR produced ~143 thousand bbl/d of crude oil and NGL and 651 MMcf/d of natural gas in 2012. This represented ~10% of PBR’s total production.

Argentina is PBR’s largest operating region outside Brazil. It has nine projects developing in Argentina.

Asset portfolio restructuring

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PBR sells and purchases its international asset portfolio to fund its capital expenditure. In one if its largest asset sales, PBR sold its 50% interest in the joint venture with Banco BTG Pactual S.A. It sold it in June 2013 for $1.54 billion. The joint venture included assets in Angola, Benin, Gabon, Namibia, Nigeria, and Tanzania.

In another transaction, PBR disposed of its interest in a joint venture in BC-10 Block in Brazil for $1.54 billion in December 2013.

Other major upstream and downstream energy producers in the U.S. include ExxonMobil (XOM), Chesapeake (CHK), and Chevron Corporation (CVX). These companies are components of the Energy Select Sector ETF (XLE).

Visit the Market Realist Upstream Oil & Gas page to learn more.

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