Petrobras Aims for Production Boost Amidst Market Oversupply: Analysts Forecast 21.47% Upside Potential.

Petrobras aims to boost production amidst oil market oversupply, with analysts forecasting a 21.47% potential upside from the current stock price. The company's strategic plans include significant developments in the Buzios field and new exploratory drilling. Petrobras has reported a 7.6% increase in production and anticipates sustained growth from FY 2025.

Petróleo Brasileiro S.A. - Petrobras (PBR) has awarded well services contracts worth a combined 1.8 billion reais ($328 million) to Halliburton Company (HAL) and Schlumberger Limited (SLB) for Brazil’s Buzios pre-salt field. The contracts, valued at approximately 1.8 billion reais, are designed to meet the demand for intelligent hydraulic completion for up to 18 development wells between 2026 and 2028 [1].

The awards represent a significant strategic win for Halliburton and Schlumberger, which are expanding their footprint in Brazil’s growing oil and gas sector. Halliburton has been steadily growing in Latin America, while Schlumberger leverages its technological edge and integrated services to secure global contracts. Both companies will provide key well completion services, such as cementing, pressure pumping, and well intervention, crucial for deepwater operations like Buzios [1].

The contracts underscore the rising demand for well completion services in Brazil, driven by expanding exploration and production across the country’s pre-salt fields. For Halliburton and Schlumberger, these awards are expected to lift earnings and provide timely revenue support amidst volatile oil prices and the cyclical nature of oilfield services [1].

Petrobras, currently sporting a Zacks Rank #1 (Strong Buy), recently achieved record production of 900,000 barrels per day at the Buzios field, one of Brazil’s most prolific oil reserves. The company operates six floating production, storage, and offloading (FPSO) units at the field, with a seventh unit expected online by year-end. By the time the Halliburton and Schlumberger contracts take effect, an additional four FPSOs are scheduled to begin production, further strengthening output [1].

While the contracts present major growth potential, executing them will not be without hurdles. Deepwater operations carry significant technical and environmental challenges, and compliance with Brazil’s regulatory framework will be essential. Despite these challenges, the agreements highlight the importance of the Buzios field in meeting Brazil’s rising production goals and underscore the role of leading service companies in unlocking its full potential [1].

Analysts forecast a 21.47% potential upside from the current stock price for Petrobras, driven by strategic plans including significant developments in the Buzios field and new exploratory drilling. The company reported a 7.6% increase in production and anticipates sustained growth from FY 2025 [1].

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/HAL/pressreleases/34332471/petrobras-taps-halliburton-slb-for-328m-buzios-contracts/