We come closer to getting a real number for the $ of one discovered bbl in the ground in Namibia Offshore: 3 - 4 $/bbl for discovered oil in the reservoir currently. I think this can go higher up when certified as P1 reserves.
São Paulo, 07/29/2024 – Petrobras is evaluating a potential acquisition in Namibia that could require US$4 billion, estimated analysts at BTG Pactual, adding that this and other recent moves by the state-owned company to purchase assets generate some risk to the payment of dividends in the short term and are starting to raise questions in the market.
Last week, Petrobras' director of Exploration and Production, Sylvia dos Anjos, told Reuters that she is negotiating with Galp to purchase a 40% stake in the Mopane exploratory field in Namibia.
Previously, Petrobras has already admitted talks about increasing its stake in Braskem and repurchasing the RLAM refinery in Bahia. In addition, Mover reported that the company is looking at potential targets in renewable generation, and the newspaper Estadão reported negotiations to repurchase Reman, a refinery in Amazonas.
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Sabesp shares could reach R$120 after privatization, says Tarcísio “Although our model already includes US$2 billion in M&A, the completion of such transactions would likely reduce the headroom in our forecasts for dividend payments, and investors would demand a higher risk premium to invest in Petrobras,” the BTG team wrote.
The projection of dividends above those of rivals in the oil and gas sector had been one of the main attractions for the investment thesis in Petrobras, despite the political risks associated with the company. BTG currently estimates dividends with a yield of 15% to shareholders in the next 12 months, compared to levels closer to 10% for global majors.
“Until very recently, we have favored the Petrobras thesis over all stocks in our coverage, but while it remains a 'BUY' based on solid fundamentals, we have begun to question whether a combination of less dividend support and more relevant near-term production growth catalysts could make PRIO a more compelling story over the next 12 months,” BTG pointed out.
CAUTION IN FOREIGN WATERS
BTG also said that Petrobras has a “weak track record in foreign waters,” which should generate some concern about capital allocation if the acquisition in Namibia goes ahead.
“We believe that investors will not welcome this measure… Although we recognize that decisions in the production segment must be made well in advance, we recommend caution until Petrobras provides more information about its objectives in the Mopane project,” explained BTG.
Analysts at XP also said they were “less constructive on Petrobras diversifying away from its core assets in Brazil,” and noted that the potential transaction could involve figures equivalent to an entire quarter of free cash flow for shareholders.
In the first quarter, Petrobras had free cash flow of US$6.5 billion, with US$3.5 billion going to shareholders.
The Mopane field is estimated to contain 10 billion barrels of oil equivalent and is “relatively well priced”, at a valuation of between US$3 and US$4 per undeveloped barrel, XP assessed.
LOOKING OUT
In an interview with EPBR on Friday, Petrobras' E&P director said that she is evaluating a portfolio of assets “not only in Brazil”, seeking to enter new exploratory frontiers, and recalled that there are currently difficulties and delays in environmental licensing processes for domestic areas in regions such as the Equatorial Margin.
“We want to stay in Brazil, generate jobs and income. But if we are not well-liked, we will find it elsewhere,” said Sylvia.
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