Energy
Price Hike Too Weak For Petrobras, Shareholder Loss Still Exceeds BP Losses
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The talk had been for closer to 15% price hikes and that is what investors were expecting. In all honesty, for a state-run public company to ever get a 15% price hike on the citizenry would not be a normal situation. Global oil prices have been coming down substantially over the last seven weeks. Had they been rising, then perhaps a double-digit request might be realistic.
After going through analyst reports and news reports, we have seen that analysts are not taking the low-percentage price hikes that well. Banco Itau BBA SA and Credit Suisse have both chimed in that the hikes are not enough. The company’s CEO also admitted in a 2012 to 2016 business update on Monday morning that the production goals have not been realistic.
Petrobras shares are down over 2% around $19.15 right before the open of the ADRs in New York and the 52-week range is $18.16 to $35.10. It is hard to imagine it, but the shareholder losses in this great Brazilian oil giant have been larger than the losses were for BP PLC (NYSE: BP) shareholders from the Gulf of Mexico rig disaster in 2010.
JON C. OGG
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