Brazilian investors have discovered that the natural resources of the pre-salt does not just mean cash in hand and that high (oil) expectancy succumbed to reality, said a report published Monday by the U.S. newspaper Wall Street Journal.
With the title “Why the Brazilian oil takes time to catch fire,” the article makes an analysis of the stock price of the oil sector in Brazil, saying that Petrobras shares are now at the same level as that in October 2006 and that OGX company stock lost two-thirds of its market value since 2008.
According to the report, the two Brazilian companies have lowered their estimates of production and are having to invest more than expected.
The energy consultant specialist in Latin America in the article, Roger Tissot says that Brazil was overestimated as to its oil potential. Tissot blamed the Brazilian government for its policies of limiting the deployment of foreign capital and expertise, slowing development and increasing costs.
According to Matt Portillo, an analyst at investment bank Tudor, Pickering, Holt & Co., heard by the newspaper, foreign companies involved in the discovery of the pre-salt reserves have been a better investment and could benefit from the enthusiasm created, including selling its shares in the business for other companies.
The newspaper says that stocks of Colombian companies in the sector have performed better than Brazil rivals.
The oil industry of the neighboring country increased by 6.5% per year since 2003. This increase coincided with new policies to encourage foreign investment in oil and gas.