PetroRio shares rise 18% with advance in the purchase of Petrobras fields

PetroRio (PRIO3) shares soared 17.87% this Friday (5) after the company advanced in negotiations for the purchase of the Albacora and Albacora Leste fields, located on the coast of the state of Rio de Janeiro, which belong to Petrobras .

The consortia led by PetroRio were chosen to begin exclusive negotiations on the final terms for the purchase, whose offer for the two fields is estimated at around US$4 billion (R$22.17 billion).

The companies involved also informed that, depending on the terms of the contracts negotiated, there could be a final round of bids for the assets in the Campos Basin, but in this case, consortia not chosen could also participate.

“The conclusion of the transaction will depend on the outcome of the negotiations, as well as the necessary corporate approvals,” said Petrobras.

According to analyst at Credit Suisse Regis Cardoso, the news is positive for PetroRio “Albacora and Albacora Leste are important assets, with more than double PetroRio’s production,” the bank said.

PetroRio, which is equivalent to approximately 1% of Petrobras’ size, has been gaining in value due to its strategy of exploring mature fields, thus reducing risks and operating costs, according to Bruce Barbosa, founding partner of Nord Research.

“PetroRio buys fields from large oil companies that are already producing or that have very advanced studies and greatly reduce the cost of production,” says Barbosa.

Since early 2018, the company’s cost of production per barrel has dropped from $42.20 to $12.30. “Of course, half of this is due to the devaluation of the real, as obviously the personnel cost is real and the gain from the sale of oil is in dollars,” says the analyst.

with Reuters