Brazilian state-run energy giant, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), or Petrobras stated that it has managed to control the fire that broke out in its offshore oil platform at the Marlim field in the Campos Basin.
The incident, that took place near the chemical-injection unit of the semi-submersible P-20 on December 26, caused light injuries to two workers and resulted in suspending production as a safety measure. Around 22,000 barrels of daily output was kept on hold as the cause of the incident was being investigated.
With a yield of 207,000 barrels of oil equivalent per day as of October, Marlim holds the third place in Brazil in terms of field production. The Marlim field has nine platforms in operation, which include the Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) operated P-20. The P-20 oil production platform has been operational for 21 years, and accounts for over 10% of the Marlim output and over 1% of Brazil’s total daily output.
Petrobras has been seeing production shrinkage in the past couple of quarters and the resultant drop in earnings. However, we are optimistic about the recent oil and natural gas discoveries reported by the company. Moreover, we continue to have a positive medium to long-term outlook on Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) thanks to its encouraging portfolio of investments, particularly in Brazil’s pre-salt reservoirs that lie below the Espírito Santo, Campos and Santos basins in the deep and ultra-deep waters. The recent decision by the Brazilian government to allow Petrobras to raise diesel prices is also a long-term positive.
Headquartered in Rio de Janeiro, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) currently holds a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.
In addition to Petrobras, one can consider energy sector stocks such as Athlon Energy Inc (NYSE:ATHL), Harvest Natural Resources, Inc. (NYSE:HNR) and Clayton Williams Energy, Inc. (NASDAQ:CWEI). All these stocks currently sport a Zacks Rank #1 (Strong Buy).
Disclaimer: This article is written by Zacks Equity Research and originally published at Zacks.com.