Brazilian energy giant
Petroleo Brasileiro S.A. (
PBR), or Petrobras S.A. announced encouraging third quarter results, helped by strong performance from the Supply segment. Earnings per ADR came in at R$1.66 (96 cents), comfortably beating the Zacks Consensus Estimate of 80 cents. However, on a year-over-year basis, Petrobras’ earnings per ADR was down approximately 28.7%, hurt by lower prices of oil and natural gas. Still, they were better than the high double-digit earnings decline suffered by other majors such as
ExxonMobil Corp. (
XOM),
Chevron Corp. (
CVX), and
Royal Dutch Shell PLC (
RDS.A).
Upstream
Total oil and gas production during the third quarter of 2009 reached 2,534 million oil-equivalent barrels per day, from 2,524 million in the previous quarter and 2,437 million in the same period of 2008. Compared to the third quarter of 2008, Brazilian oil and natural gas liquids production increased 4.8%, while international production was up 24.6%. However, Brazilian natural gas volumes were down 3.3% from the year-ago period, while international output during the quarter was down 6.0% year over year.
During the third quarter of 2009, the average sales price of oil in Brazil decreased 36.4% from the year-earlier period to $64 per barrel. Average sales price of international oil was down 16.9% year-over-year, reaching $57.16 per barrel. Regarding natural gas, average international sales price decreased 21.5% from the third quarter of 2008, while domestic price was down 61.5%.
Downstream
Refining costs per barrel in Brazil was down 2.6% to $3.37 and internationally, it fell 45.2% to $3.51. Lifting cost per barrel moved down 24.5% in Brazil to $22.86, while overseas costs rose 9.4% to $5.6. Petrobras exported an average of 724,000 barrels of oil per day, 10.2% higher compared to the same period last year.
Capital Spending & Balance Sheet
Year to date, Petrobras’ capital investments have reached R$50.7 billion. At the end of the September quarter, the company had cash and cash equivalents of R$30.1 billion and long-term debt of R$79.6 billion.
Segment Performance (Year to date)
E&P
The E&P segment earned R$13.1 billion during the first nine months of 2009, down 59.4% year over year, reflecting lower oil prices and the increase in exploration costs due to higher geological and geophysical expenses. These were somewhat negated by the 6% increase in average daily oil and NGL production and the lower government takes.
Supply
Segment earnings came in at R$12.1 billion as against a loss of R$2 billion in the first three quarters of 2008. The improvement over the previous-year period can be attributed to lower oil acquisition/transfer costs and reduced imported oil product costs, partly offset by lower export prices and, in Brazil, to the reduced price of those oil products pegged to international prices.
Gas & Energy
During the first nine months of 2009, Gas & Energy segment’s income reached R$718 million, compared to a loss of R$291 million in the year-earlier period. The positive comparison was due to reduced energy purchase costs, the greater availability of energy for trading, increased fixed revenue from auctions, and a reduction in the natural gas import/transfer cost. Partly offsetting these factors were reduced thermal power output due to higher hydroelectric reservoir levels and lower gas sales volume.
Distribution
Earnings in the Jan – Sep 2009 period reached R$949 million, up slightly (by 1.7%) from the same period previous year. The upturn in the operational results reflect an 11% increase in sales volume, mainly on the back of the inclusion of the commercial activities of Alvo Distribuidora. This was partly cancelled by narrowing of sales margins due to lower average sales price.
International
Petrobras’ International segment lost R$41 million during the first three quarters of this year, as against a profit of R$354 million in the same period of 2008. The year-over-year reduction came because of lower international oil prices and lower equity income due to losses on investments in the U.S.
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