Petroleo Brasileiro SA Petrobras (ADR) (PBR): Brazilian Authorities Finally Turning Things Around for the Company
The latest development is now a major positive for CEO, Pedro Parente
Published By: Angela Campbell on June 8, 2016 07:49 am EST
The Brazilian state run company, Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) is trying to turn over a new leaf now. In the latest development on Saturday, the energy minister of Brazil is supporting the company to set its fuel policy. The company which has lost over 50% of its value since 2014 is now getting a free hand to construct its fuel policy.
Petrobras has come under a lot of fire from the Brazilian regulatory authorities. The company was indicted with bribing local politicians and other officials along with unlawfully inflating construction contracts value. The allegations have caused a lot of harm to the company in terms of prestige and performance. In addition to the investigations, the government policies have also contributed to the company’s demise.
The energy ministry of Brazil had made it obligatory for the company to sell gasoline at a subsidized rate. As a result, it was forced to sell gasoline at a much lower rate then what was going ahead in the market. So at a time when other companies engaged in the downstream segment were benefitting from a fall in crude oil prices, Petrobras had to suffer due to these government controls.
Brazil, which was growing at a decent rate, was left to nothing as the whole state was webbed into the scandal. Petrobras, considered the giant of the global industry, now due to the policies is bombarded with a huge debt load of over $130 billion. However, the new policy will now hopefully help bring things together at the state run company.
The former CEO, Aldemir Bendine was replaced with Pedro Parente, who is keen to turn things around for the company and the latest development is now a major positive for the new CEO.
Se viene el aumento de combustibles esta va a volar
