Brazil's Petrobras Posts Profit In First Quarter

Rio de Janeiro, (UrduPoint / Pakistan Point News - 14th May, 2021 ) :Brazil's state-run oil company Petrobras said Thursday it saw 1.17 billion reais, or about $210 million, in net profits in the first quarter of 2021, compared to a loss of about $8.35 billion during the same period last year.

That means the largest company in Brazil has now marked two consecutive profitable quarters.

Its net earnings from the fourth quarter of 2020 were much higher however, at about 59.9 billion reais ($11 billion), a major turnaround after three quarters of losses imposed by the coronavirus pandemic.

According to a statement from the Rio de Janeiro-based firm, the first quarter results were influenced by, among other things, the price increase of Brent crude oil and rising sales of diesel fuel.

The average price of a barrel of Brent crude oil went from $44.23 in the last quarter of 2020 to $60.90 in the first quarter of this year.

"The numbers show our team's capacity to generate sustainable results for our investors and for society in general, even in a challenging environment," Petrobras's new president Joaquim Silva e Luna said.

The first quarter of 2021 was marked by Brazil President Jair Bolsonaro's displeasure with rising fuel prices and his controversial decision to replace respected economist Roberto Castello Branco as the head of the company in February.

The move raised fears that the far-right president would try to interfere with fuel prices as he seeks re-election next year, a concern that worried investors and triggered a sharp drop in shares.

The company substantially raised fuel prices in the first few months of the year, provoking truck drivers to threaten to strike only three years after a similar strike in 2018 paralyzed the country for days.

Petrobras was mired in crisis from 2014 to 2017 when a giant corruption scheme involving business leaders, political parties and former state officials to rig government contracts was revealed.

The pandemic hit just as the company was emerging from the scandal, causing fuel prices to plummet to historic lows last year as lockdowns froze travel all over the world.