All Entries Tagged With: "South American Oil Play"

Petrobras Strong Buy

Petroleo Brasileiro SA (PBR)

- This stock has soared in the past month and I still see it going much further. I recommended it back on April 13th at $35.90 and now I am saying its still a strong buy at $43.26. Make sure to pick up soon before you miss out on the huge oil rally. For those of you who don’t know about Petrobras, it is a Brazil-based holding company engaged in the oil and gas exploration and marketing. You might be wondering why it is such a good buy, here it is. I foresee PBR rapidly expanding.  This is a company waiting to take off and I might have caught another huge break. The company has been granted much as $10 billion by China Development Bank to explore recently discovered deep-water oil reserves. Take into consideration it was only a couple months ago when the Brazilian government loaned the company $30 billion to help with the companies $174 billion investing strategy aimed at finding the Americas’ largest discovery in three decades. While most oil companies are cutting costs PBR is increasing investments by 50%. Something big is soon to happen and when it does make sure to be an investor. The government backed money will help pay for the immense oil and gas discoveries they have found off Brazil’s coast, which could turn Brazil into the world’s major oil exporter pushing out the Middle East. These oil fields are abundant yet deep underwater needing many resources in order to exploit. That is where China’s help will come in. More good news for PBR who signed a separate agreement a couple months ago to sell 60 to 100 thousand barrels of crude oil a day, 5% of total production, to a Chinese Petroleum and Chemical Company known as Sinopec. Another memorandum from China National Petroleum (CNPC) could add another 60,000 barrels a day. Latin America loves this company and governments across the continent are injecting capital in hope that it will succeed. With plans to increase production levels by 10 times the sky is the limit for PBR. The reason that PBR is such a strong play is one it is international/emerging markets which allows it to drill offshore and do whatever it wants something U.S. companies are restricted at doing. Secondly the backing of Latin American governments will provide funding to make sure that it falters. Thirdly if these discoveries are true they will have an abundant amount of crude to supply the world when the Middle East dries up.