Petrobras S.A. PBR, a Brazilian state-owned energy company, has initiated the teaser phase of transferring a minority stake in the Tartaruga field. In this phase, the company provides the initial details about the assets put up for divestment. PBR plans to divest its 25% stake in the Tartaruga field, located in the shallow waters of the Sergipe-Alagoas Basin. The field lies in Pirambu, situated in Sergipe in Brazil.

Overview of Tartaruga Field

The field is operated by SPE Tiêta (controlled by Petrorecôncavo). The field’s contribution to PBR’s production is seemingly modest. In the first nine months of 2024, Petrobras’ share of production from the Tartaruga field was approximately 41 bpd of oil and 723 m3/day of associated gas. The production figure represents less than 1% of the total production of the state of Sergipe.

Potential Impact of the Transfer of Stakes

The decision to divest the 25% stake in the field was taken after considering that it is a non-core asset within PBR’s portfolio. The Tartaruga field is a non-operated asset that does not generate any synergies for the company’s assets. The sale of this non-core asset aligns with Petrobras’ broader strategy of streamlining its portfolio and focusing on assets offering a higher return.

The transfer of the stake is anticipated to have no effect on the company’s existing operations in the region. Furthermore, since this is a non-operated asset, Petrobras has no employee working exclusively on the asset. As a result, the transfer should not affect Petrobras’ workforce.

PBR to Sustain Investments in Sergipe

Petrobras shall continue to make key investments in Sergipe, Brazil, as outlined in its 2025-2029 Business Plan. This includes commissioning two Floating Production Storage and Offloading vessels (FPSOs), each with a capacity of 120,000 barrels per day, for the Sergipe Deepwater area (SEAP). Additionally, PBR shall invest in building a gas pipeline with a transportation capacity of 18 million cubic meters of gas per day.

PBR’s Zacks Rank and Key Picks

Currently, PBR carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Smart Sand, Inc. SND, FuelCell Energy FCEL and Nine Energy Service NINE, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, providing a positive outlook.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

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Petroleo Brasileiro S.A.- Petrobras (PBR) : Free Stock Analysis Report

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