Petrobras Raises Alarm Over Brazil's New Reference Oil Price Policy

Petróleo Brasileiro S.A. - Petrobras PBR has expressed concerns over Brazil’s upcoming change in the reference oil price, a key factor in determining taxes and royalties paid by drillers. The company noted that the new benchmark could undermine the economic viability of offshore post-salt fields and onshore projects, which it is seeking to revitalize. Unlike pre-salt reserves, which carry higher value, oil from post-salt fields commands a lower price, making them more vulnerable under the revised rules.Impact on Brazil’s Energy LandscapeThe change comes after years of debate, with the oil regulator ANP approving the new criteria in July. The government expects the adjustment to raise taxes and royalties would potentially boost revenues by an additional 1 billion reais ($184 million) by year-end. However, it could also result in a heftier tax and royalty bill for operators like Petrobras. The company noted that the new reference oil price will treat both types of production (pre-salt and post-salt) similarly when calculating fiscal obligations, although post-salt fields are less profitable. While this supports fiscal goals, Petrobras fears it could slow investment in areas still rich with untapped reserves.Industry Pushback and What’s at StakeThe oil industry, and Petrobras in particular, has been quick to highlight the risk of these new rules discouraging investments in less profitable, post-salt and onshore fields. Higher government receipts may come at the expense of much-needed capital for future projects, as increased tax pressure could undermine plans for further exploration and development. Meanwhile, Brazil’s refining sector has welcomed the move, arguing it will help create a more balanced market for domestic sales and exports.Balancing Revenues and ViabilityThe company stressed the fact that while a lot of oil is still left to be produced, ensuring its economic feasibility remains critical. The debate underscores Brazil’s challenge of balancing its need for greater government revenues with the long-term sustainability of its energy sector. For Petrobras, the shift raises questions about future project competitiveness and investment in non-pre-salt fields.PBR’s Zacks Rank and Key PicksHeadquartered in Rio de Janeiro, Petroleo Brasileiro S.A., or Petrobras S.A., is the largest integrated energy firm in Brazil and one of the largest in Latin America. Currently, PBR has a Zacks Rank #3 (Hold).Investors interested in the energy sector might look at some better-ranked stocks like Vitesse Energy, Inc. VTS, Global Partners LP GLP and Enbridge Inc. ENB. WhileVitesse Energy and Global Partners currently sport a Zacks Rank #1 (Strong Buy) each, Enbridge carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.New York-based Vitesse Energy is an independent energy company, engaged in the acquisition, development and production of non-operated oil and natural gas properties. The Zacks Consensus Estimate for VTS’ 2025 revenues indicates 15.3% year-over-year growth.Global Partners is a Delaware limited partnership formed by affiliates of the Slifka family. It is one of the largest wholesale distributors of distillates. The Zacks Consensus Estimate for GLP’s 2025 earnings indicates 23.24% year-over-year growth.Calgary, Alberta-based Enbridge is a leading energy infrastructure company. One of its businesses is the transportation of energy through the most extensive and advanced crude and liquids pipeline system. The Zacks Consensus Estimate for ENB’s 2025 earnings indicates 9.50% year-over-year growth.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Petroleo Brasileiro S.A.- Petrobras (PBR): Free Stock Analysis Report Enbridge Inc (ENB): Free Stock Analysis Report Global Partners LP (GLP): Free Stock Analysis Report Vitesse Energy, Inc. (VTS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks