Petrobras Tumbles Second Day to Lowest in Eight Years: Rio MoverRodrigo Orihuela
Petroleo Brasileiro SA sank for a second day, pushing the state-controlled oil producer’s share price to an eight-year low.
Petrobras, as the company is known, dropped 1.7 percent to 14.80 reais in Sao Paulo, the lowest since October 2005. Brazil’s Ibovespa stock benchmark slid 0.6 percent.
The stock has been falling amid government restrictions on domestic fuel price increases, which have contributed to $35 billion of refining losses at the Rio de Janeiro-based company since 2011, when subsidies to local diesel and gasoline prices started. Brazil is seeking to cap the price of imported fuel to control inflation as it tries to boost Latin America’s biggest economy, which will expand 2.1 percent this year according to the median estimate of economists surveyed by Bloomberg.
Maria das Gracas Foster has been making public calls to align global and domestic prices since she took over as chief executive officer in February 2012. The government has allowed periodic increases without granting Foster the right to increase them at her own discretion.
Today’s decline reduced Petrobras’s market capitalization to 185 billion reais ($76 billion), compared with 393 billion reais on Nov. 8, 2007, the day it announced the discovery of the Tupi oilfield, now called Lula in the so-called pre-salt region of Brazil. Most of the company’s $237 billion five-year investment plan is focused on developing the reserves off the Atlantic coast as far as 300 kilometers from Rio.