...Transforming a Brazilian National Champion into the World’s Leading Energy Exploration and Production Company Team 5: Todd Anderson Guy Gresham Gopinath Polavarapu Heraclio Rojas Alina Shastun Who is Petrobras? Background: • • • • Brazil’s national oil company and the largest in Latin America Petrobras accounts for 95% of Brazil’s national oil and gas production Ownership – Government (64%) and Private Sector Market Capitalization – fifth largest publicly traded energy company in the world Current Strategy: • • To be the world's largest oil producer by 2015 Plan to invest US$ 224 billion by 2014 – Drilling Rigs, Supply and Special Vessels, Production Platforms • Social Responsibility: economic, social and environmental improvement in Brazil Brazil’s Growing Role in Tomorrow’s Energy Market Global consumption will see a paradigm shift from developing economies to emerging. Global Energy Consumption 1990-2035 Future energy consumption will be driven by emerging markets (non-OECD) demand: – Emerging economies will consume 38% more energy than Developed (OECD) economies in 2020 and 67% more in 2035 Growing concerns over environmental risks Increased regulatory pressure for more safety and environmental regulation in drilling as well as distribution of oil Oil reserves are focused in geopolitically volatile regions The largest oil discoveries have come from Brazil’s offshore, “pre-salt” basins Pre-salt fields are estimated to hold 100 billion barrels of oil, enough...
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...The world’s most indebted company delayed its earnings release due to a broad corruption scandal and the recent arrests during “Operation Car Wash” which has threatened the market and investors. On Friday, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) set a new record low for its share price in more than a decade, which saw its stock ranging between $9.51-$10.04. Petrobras stock tumbled 2.5% Friday on New York Stock Exchange (NYSE). The yield on its bonds surged sharply upwards. The Brazilian real hit its lowest in nine years. Disappointed investors and mutual funds agencies The current President Dilma Rousseff, who was the chief executive of Petrobras before taking the presidential throne in 2010, is not the only one, nonetheless,...
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...energy purposes in the world. Two years later, Professor Expedito Parente, of the Ceará Federal University, discovered biodiesel made from cotton oil and, in 1980, he registered the first world wide biodiesel patent, now in the public domain. Throughout the world, with the passing of the years and the intermittent energy crises, associated to a greater demand for fossil fuels, new and strong stimuli emerged for the development of production technologies both for ethanol and biodiesel. These two products are starting to have a leading role in the world’s energy matrix and in the international fuel market. Thanks to its climate, geography, vast areas available for cultivating grain and sugar cane and, also, the high technology developed by Petrobras, in the past few years Brazil has become, in world terms, one of the largest producers of biofuels, with a singular and enviable potential Presentation for growth. Currently, nine out of ten cars sold in Brazil have flex fuel engines, that is, they are...
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...Table of Contents Case 1 Petrobras 3 Case 2 Mattel Toxic Toys – Dangerous Play 3 Case 3 Discrimination in sports – «Williams Brothers» 5 References 5 Introduction In this essay I want to analyse three cases, connected with unethical behaviour in Business. First two cases cover company-wide wrongdoings in big and well-known companies, as Petrobras and Mattel. And the third one is individual-wide case about gender discrimination in sport. Thus, according to these three cases, importance of ethics consideration in any actions will be revealed. Case 1 Petrobras Short summary: Ethical considerations/issues: Dilemmas of the decision-maker: Goals of the decision-maker: Values and interests of stakeholders involved: Stakeholders Values Interests...
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...How corruption affect Petrobras: Petroleo Brasileiro S.A. is a Brazilian based multinational company that explores, produce, transports, distributes oil and natural gas. Petrobras owns and operates biofuel, oil tankers, fertilizer plants and distribution pipelines across Brazilian territory. Petrobras is one of the largest producers of oil in the world and the biggest company in South America (employs over 80 thousand people) with a market value above $30billion. Most importantly, Petrobras has more than half of the voting rights are controlled by the government of Brazil (Standard & Poor’s, 2016a). Brazil’s rise was empowered by the oil giant Petrobras, with the biggest oil discoveries in the past decade. As for April, 2004 everything changed dramatically. Scandal started exposure regarding the acquisition of a Houston refinery, because the estimated cost of $1.19 billion from Astra through this acquisition, but only paid $42.4 million. Petrobras’ high ranked former executive (Paul Roberto Costa) was arrested due to supposed involvement in a money laundering arrangement in order to increase the cost in the constructions of a 9 refinery from $2.5billion to $18.5billion (Romero &Thomas, 2014). Petrobras also faces inspections that some employees received bribes totaling $139 million from SBM Offshore (German oil supplier). What is more, a contract with Odebrecht, one of Brazil largest construction and oil services providers was overbilled. According to Bloomberg, “a...
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...Business: Petrobras is the fourth largest company in the world and the largest in the Southern Hemisphere. It has control over significant oil and energy assets in 18 countries in Africa, North America, South America, Europe and Asia. It carries 11.7 billion barrels of oil making it the fourth biggest oil reserves among petrochemical companies. This is before the recent discoveries in four new locations. Petrobras sponsors a few things: The Ministry of Mines and Energy's National Program for the Oil Products and Natural Gas Use Rationalization. These programs promote the development of a no waste culture in the use of nonrenewable natural resources and encourage efficiency in energy use in many sectors. These programs have developed environmental education actions but they emphasized on the efficiency on transport, residencies, and industries. One of the major companies of Petrobras is Petrobras Transporte S.A. which is the largest oil and gas transportation company of Brazil. History of Business: Petrobras was founded in 1953 by Getúlio Vargas because of the economic crisis created by pro-US Dutra. The way this was fixed was by creating a nationalist policy. This policy caused the usage and increase in the country natural resources and to stray away from foreign dependency. Vargas served as Brazil’s president and later dictator from 1930 to 1945. The company was founded when Vargas was democratically elected during his second presidency in which started in 1951. Petrobras was...
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...Inside Petrobras, opinion on how to respond to Ecuador’s actions was divided. One group was inclined to rely on the Brazilian government to assist in fashioning a broader political solution, similar to what happened in 2006 in response to the Bolivian government’s changes to Petrobras’s gas exploration and development contracts with that country. Another group advocated that, as a public company, Petrobras should act accordingly and seek compensation through international arbitration, perhaps at the International Center for Settlement of Investment Disputes (“ICSID”). (See Exhibit 2 for ICSID’s member States.) Petrobras When founded in 1953, Petrobras, Brazil's state-controlled oil company, was a vital symbol of national pride. "The oil is ours" was an oft-repeated slogan. The company was incorporated as a mixed-capital company1 with a government-granted monopoly for all crude oil and gas production, refining and distribution in Brazil. In 1997, Brazil enacted the so-called “Petroleum Law” to end the oil monopoly and open the oil and gas markets in Brazil to foreign investment. Restrictions on ownership by non-governmental entities of shares in Petrobras were lifted and foreign ownership of shares was permitted. In response to these changes, in August 2000, Petrobras was partially privatized through a listing of its shares (ADRs*) on the NYSE. As part of the company’s new strategy, it also sought additional opportunities to expand abroad. Petrobras’ International Expansion ...
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...PETROLEUM IN BRAZIL: Petrobras, Petro-Sal, Legislative Changes & the Role of Foreign Investment ANDREW D. FISHMAN George Washington University Washington, DC 20052 (860) 690 - 7553 AFishman11@Gmail.com Introduction On November 8, 2007, the state-owned Petróleo Brasileiro S/A (Petrobras) announced that it had discovered a “monstrous” reserve of light oil in the Tupi field of the Santos basin, off the coast of southern Brazil. A day later it removed 41 adjacent exploration blocks from a scheduled government concession auction to reanalyze how to best exploit the new resources.1 Since opening its petroleum industry in 2007, Brazil has attracted hordes of foreign corporations and created hundreds of thousands of jobs. In 2009 President Lula proposed sweeping changes to the industry in the form of four bills that would greatly increase the government’s involvement and relegate foreign oil companies to the role of “subservient partners.” In that same year, Petrobras successfully executed a public stock offering worth almost $79 billion (bn). Yet despite the largest public offering in history and tens of billions of barrels in proven and expected reserves, analysts at Credit Suisse and Deutsche Bank, among others, have downgraded Petrobras’ investment rated to “neutral” and “hold,” respectively. Despite incredible potential, uncertainty over the potential increase in government control, over-ambitious targets, infrastructural bottlenecks, technological capabilities, and corruption...
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...The Brazilian Federal Data Processing Service Michael La Motte CIS 512 Dr. Robert Culver Strayer University 01/13/15 There where news that government officials and Petrobras, Brazil national oil company, have been targeted of electronic spying by the NSA and other agencies, based on the documents leaked by former NSA contractor Edward Snowden. Brazil’s President Dilma Rousseff consider this action a breach of international law and the Brazilian Federal Data Processing Service known as Serpro will build a secure email system for Brazil’s federal government. The statement by the Director of National Intelligence James R. Clapper said, “We collect this information for many important reasons: for one, it could provide the United States and our allies early warning of international financial crises which could negatively impact the global economy. It also could provide insight into other countries’ economic policy or behavior which could affect global markets.” Brazil over the years pursued close relationships with key U.S rivals like Iran, Venezuela, and Cuba and also because of corruption in 2007 three Petrobras executive where arrested. This will be enough reason for NSA to snoop on Brazil. Information is the key to resolved present and future issues. The Brazilian Federal Data Processing Service was created on December 1964 to help de sector of the public administrator and has improved technologies on several government agencies and is incorporated to the...
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...STRAYER UNIVERSITY THE SHELL OIL COMPANY: FUEL OIL CARGO TRANSPORTATION COST MINIMIZATION A TERM PAPER SUBMITTED TO PROFESSOR FARAMARZ FATHNEZHAD, PH.D. QUANTITATIVE METHODS FOR BUSINESS MAT540 007016 WINTER 2006 BY ALPHARD VICTOR T. ROMERO ALEXANDRIA, VIRGINIA MARCH 2006 Contents Chapter 1. Introduction…………………..…...…………..……………………..………..2 2. The Case Of Shell Oil Company……………………………….…...……..….3 3. The Case Figures And Calculations.……….…………………….….......….…5 4. Conclusions……………………….…….…………………………..…………9 Bibliography…..………………………………….…………….………………………..10 -1- CHAPTER 1 - Introduction In today’s competitive global business environment, more and more business organizations have realized that the creativity and ingenuity needed to develop new products, provide better services, grow market share, and maintain a competitive advantage can best come through an effective practice of management science (Strohmeier n.d.). One of the known and established firms who have practiced and maximize the use of the management science application is the Shell Oil Company. The Shell Oil Company is an affiliate company of the petroleum-chemical giant firm Shell Group, a global firm that operates in more than 140 countries and territories worldwide and spans its operations in different subsidiaries and divisions. The Shell Oil Company, with its corporate office headquartered in Houston, Texas, is one of the leading oil and gas producer...
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...In the economic world, BRICS is a grouping acronym that refers to the countries of Brazil, Russia, India, China and South Africa. These countries are all known to be at the beginning of newly advanced economic development. The acronym was created by Jim O'Neill in a 2001 paper entitled "Building Better Global Economic - BRICS". The acronym has come into worldwide use as a symbol of the shift in global economic power away from the developed G7 economies towards the developing world. G7 countries are existing nations with well-developed economies. It is estimated that the BRICS economies will overtake G7 economies by 2050. Although there is argument of whether South Africa should be included in the BRIC countries due to its population of 50 million, it was still included. China and India, predictively, will become the dominant global suppliers of manufactured goods and services, while Brazil and Russia will become similarly dominant as suppliers of raw materials. India is the second largest country with a population of over 1.2 billion people. The country thrives off of small businesses headed by poor families trying to make a living and to support their families. In the past decade however, India has made it clear they want to expand their horizons. This idea is not favored with everyone due to the fear of forgetting India's roots and traditions to the modern way (or Western way). It is also causing a stir about the decline in profit to small businesses. The value of Indian economic...
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...ABSTRACT The purpose of this project is to determine multinational corporate sustainability within the oil industry and perform country analysis, industry analysis, and analysis of firm’s international strategies. INTRODUCTION The five oil companies that we chose from the 2010 Global Fortune 500 are ExxonMobil, Sinopec, ConocoPhillips, Petrobras, and Lukoil. In our project, we performed analysis on the 10K report of domestic companies, as in ExxonMobil and ConocoPhillips and the 20F report of foreign companies, as in Sinopec, Petrobras and Lukoil. A comparison was done on the five companies to determine if there exists a corelation between sustainability perspective and financial performance. OIL INDUSTRY ANALYSIS Oil accounts for a large percentage of the world’s energy consumption, ranging from 32% for Europe and Asia, and 53% for the Middle East. The world consumes 30 billion barrels of oil per year, with developed nations being the largest consumers. The United States consumed 25% of the oil produced in 2007. In 2009, world energy consumption decreased for the first time in 30 years (-1.1%), as a result of the financial and economic crisis (GDP drop by 0.6% in 2009). This evolution is the result of two contrasting trends. Energy consumption growth remained vigorous in several developing countries, specifically in Asia (+4%). Conversely, in OECD, consumption was severely cut by 4.7% in 2009 and was thus almost down to its 2000 levels. In North America, Europe and CIS...
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...Internship Report on Portfolio Mix and Operational Performance of NBFIs in Bangladesh Under the Supervision of Dr. M. Sadiqul Islam Professor Department of Finance University of Dhaka Prepared by Robin Kumar Saha BBA ID: 16-039 BBA 16th Batch Department of Finance Faculty of Business Studies University of Dhaka Date of Submission: ............, 2014 Letter of Transmittal .................., 2014 Dr. M. Sadiqul Islam Professor Department of Finance University of Dhaka Subject: Submission of Internship report. Dear Sir, Here is the report on ‘Portfolio Mix and Operational Performance of NBFIs in Bangladesh’ you asked me to conduct. Working on a practical field with theories helped me to build my theories strong and specific. I believe that this report will help me to know about the perfect mix of investment portfolio of NBFIs in Bangladesh and its relation with the operational performance of the firm. During preparing this report I have enforced my best effort. Surely, it enriches our knowledge and promotes our study. Thank you for giving me such an opportunity for working on the topic. I will be honored to provide you any additional information, if necessary. Sincerely yours, (Robin Kumar Saha) BBA ID: 16-039 BBA 16th Batch Acknowledgement I would like to express my sincere gratitude and cordial thanks to some person who helped me In the course of preparing this report. First of all, I want to mention my honorable...
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...reasonable prices → stable economy - Inelastic demand → positive effect - US dollar (and US economy) →significant impact - Exchange rates → impact on buyers and suppliers Socio-cultural Factors - Values and beliefs shape preferences for energies → energy mix changing towards greener energies - Need for companies to show social responsibility → supporting sustainable human development through investments in education, training, social and environmental activities Technological Factors - Extremely technology-driven: improved upstream technologies →better recovery of hydrocarbon, recovering oil from reserves considered exhausted → improved profitability (gains) - Breakthrough technology in ultradeep-water extraction →competitive advantage for Petrobras - Advanced technology → profound impact on long-term sustainability . Industry Competition Analysis (Porter’s five forces) In order to create a profitable competitive strategy, a firm must first examine the basic competitive structure of its industry through the competitive forces, because the potential profitability of the firm is heavily influenced by the profitability of its industry. For this purpose, corporate strategists advise the use of the Porter’s Industry Analysis framework, which describes the competitive environment in terms of five basic competitive forces. Based on Porter’s framework, for instance,...
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...Nationalization is defined as the concept of a government seizing the private property of foreign nationals. In other words, nationalization is the alteration or assumption of control or ownership of private property by the state. It is historically a more recent development and differs in motive and degree from “expropriation” or “eminent domain,” which is the right of government to take property for particular public purposes (such as the construction of roads, reservoirs, or hospitals), normally accompanied by the payment of compensation. Nationalization may occur through the transfer of a company’s assets to the state or through the transfer of the share capital, leaving the company in existence to carry on its business under state control. Nationalization has often accompanied the implementation of communist or socialist theories of government, history tells us, as was the case in the transfer of industrial, banking, and insurance enterprises to the state in Russia after 1918. More recently, a further impetus has been resentment of foreign control over industries upon which the state may be largely dependent, as in the nationalization of the oil industries in Mexico in 1938 and Iran in 1951, and in the nationalization of foreign businesses in Cuba in 1960. In my view, another motivating factor for recent nationalizations may be the belief in some developing countries that state control of various industrial operations is at least temporarily necessary because of the lack...
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