PetróleoBrasileiro S.A. or Petrobras PBR recently snapped up a bargain with a new five-year deal to supply naphtha to Braskem SA’s BAK unit in Sao Paulo as well as ethane and propane to another unit in Rio de Janeiro.
Per the contract, Petrobras will supply around 2 million tonnes of naphtha annually to Braskem. This R$19-billion deal became effective Dec 23, 2020 and will continue through Dec 31, 2025.
According to the R$ 7.6-billion ethane and propane pact, Petrobras will supply at least 580,000 metric tonnes of ethylene annually to Braskem until the stipulated date. This new agreement will follow the existing sales contract that is scheduled to close on Dec 31 of this year.
Earlier this year, Petrobrasinked a five-year deal to supply naphtha to Braskem’s units in Bahia and Rio Grande do Sul states. Per the contract, Petrobras will supply at least 650,000 metric tonnes of naphtha annually to Braskem with an additional maximum capacity of 2.8 million metric tons. These new agreements will follow the existing sales contracts that are scheduled to be completed in December.
Management at Braskem, which is one of the largest petrochemical operations in Latin America, believes that this multi-year deal will help Braskem compete in the supply chain space, boost its investments and expand business in the petrochemicals sector.
Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons besides other energy-related operations.
Zacks Rank & Key Picks
Petrobras currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Hess Midstream Partners LP HESM and China Petroleum & Chemical Corporation SNP, each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Petroleo Brasileiro S.A. Petrobras (PBR) : Free Stock Analysis Report
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