Petrobras Share Value Imperiled by Top Brazil Find, UBS Says
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Petroleo Brasileiro SA, Brazil’s state-run crude producer, risks losing shareholder value from developing the country’s largest oil discovery as high costs and taxes erode returns, according to UBS AG.
Petrobras, as the biggest producer in ultra-deep waters is known, may lose as much as 1.50 real ($0.64) a share from its role in the Libra field that is estimated to hold as much as 12 billion barrels of recoverable crude, UBS analysts led by Lilyanna Yang said in a note to clients. A signing bonus of 15 billion reais for Petrobras and its partners will strain the Rio de Janeiro-based company’s cash flow, UBS said.