Petrobras Sees Opportunity in High Energy Demand
From Fox Business News
Petrobras “is searching for the best profits possible,” Ms. Foster told reporters, noting that it is possible to make some quick cash during days when spot-market electricity rates skyrocket because of strong demand.
A drought that has left reservoirs in Brazil’s vaunted hydroelectric power system at near-record lows and unseasonably hot summer weather has raised concerns that Latin America’s largest economy could face energy rationing last implemented a decade ago. Adding to concerns was a recent report by a local consultant group that Petrobras was importing liquefied natural gas and selling the fuel at a loss to meet demand from natural-gas-fired power plants.
While Ms. Foster said daily volatility in LNG markets could lead to “negative” results, the executive said that Petrobras’s gas and energy unit had returned “good profits” over the past few years–including a more than one billion-Brazilian-real ($492 million) profit in the first nine months of 2012. The profit may not be as “immense” as from the company’s exploration and production segment, but “you can really take advantage of the synergies within the company,” Ms. Foster said.
Because of increased spot-market prices for liquefied natural gas, Petrobras is only importing about half of its gasification capacity, Ms. Foster said. Instead, the company is using natural-gas supplies to produce electricity rather than fertilizers, Ms. Foster said as an example. The natural-gas market in Brazil, which included deliveries of more than 90 million cubic meters Tuesday, is fully supplied, she added.
“There won’t be any natural-gas shortages in Brazil because of thermal-electric power generation,” Ms. Foster said. Should Brazil need more natural gas, the company has the “flexibility” to increase LNG imports, she added.
Petrobras struggled throughout 2012 as falling crude oil production, a refining shortfall and growing demand for gasoline and diesel fuel forced the company to import hefty volumes of the two fuels.
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