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REFILE-UPDATE 2-Petrobras shares will recover but not from fuels - CEO
April 25, 2012 / 4:20 PM / 6 years ago

REFILE-UPDATE 2-Petrobras shares will recover but not from fuels - CEO

* Petrobras does not plan to raise fuel prices now - CEO
    * Company in talks to regain rights in Neuquem, Argentina
    * More rigs, oil output to redeem share price in investors'

    BRASILIA, April 25 (Reuters) - Petrobras' poorly
performing shares will recover in the coming months as more
drilling rigs are delivered and more oil reserves are
incorporated, the chief executive of the Brazilian state-run oil
company said on Wednesday.	
    But Maria das Gracas Foster, appointed to the top post in
February, added that shares would not get a boost due to growth
in the company's revenue from locally sold gasoline or diesel.	
    When asked exiting Congress after questioning from
lawmakers, Foster told reporters who asked if she planned on
raising fuel prices, "Now is not the time." 	
    On April 17, Foster said Petrobras will have to raise the
price of gasoline and diesel domestically due to the high
sustained price of oil, which the company expects to remain at
around $119 a barrel through 2012. 	
    Earlier on Wednesday while Foster was testifying before
Congress, she told Federal Deputy Arnaldo Jardim Petrobras
shares would not fall forever. Jardim revealed that he had a
position in Petrobras stock and thought the price was too low. 	
    He asked Foster, who has a career spanning more than three
decades at Brazil's biggest company, if the low share price
reflected investors' fears that the company was not raising oil
output and securing new rigs and platforms fast enough.	
    "The tendency is for a systematic appreciation" in the share
price, Foster said. "As we have more rigs and we incorporate
more reserves, I have no doubt that Petrobras shares will be
more recognized in the coming months, medium-term and certainly
in the long term."	
    On the BM&FBovespa exchange, the stock was trading down 0.9
percent at 21.06 reais. It had fallen 40 percent since peaking
at 36.58 reais in late 2009, making Petrobras one of the worst
performers among the major oil companies over the period.	
    Foster said all of Brazil's drilling rigs, of which the
company expects to have 40 in operation by the end of 2012, are
foreign made, but by 2016 all new rigs would be Brazilian made.	
    Petrobras has commissioned Brazilian shipyards, many of
which haven't even been built yet, for hundreds of drilling
rigs, production platforms and vessels for the development of
Brazil's newly discovered oil riches in the so-called subsalt
layer deep under the ocean floor off its coast. 	
    Foster said she would be unforgiving with shipyards that
were not able to deliver on the billions of dollars in contracts
that Petrobras has granted them. 	
    One of the obstacles facing Brazil's nascent shipping
industry is a national content law that requires at least 60
percent of the value of the ship or rig to have been produced at
home. But Brazil lacks the know-how and technology for building
complex and technically sophisticated vessels that operate in
the oil industry.	
    Foster defended the local content law, saying if something
were to malfunction with a rig or production platform, she
wanted Petrobras to be able to solve the problem quickly with
the local industry rather than having to wait months for a
solution produced in Asia or Europe.	
    Foster said Petrobras is in talks to regain its exploration
rights that the provincial government of Neuquem in the
Argentine suspended, after it alleged the company was not
investing enough to develop hydrocarbon deposits in its blocks.	
    "There is no plan to increase investments in Argentina,"
Foster said. "Our big priority is the subsalt and to go for the
most profitability. The company needs to seek large-scale
production but Argentina has fields that interest us a lot."

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