Petróleo Brasileiro S.A. – Petrobras

What it is

Petrobras is Brazil’s state-controlled oil company, founded in 1953. It explores for and produces crude oil and natural gas, mostly from deep-water fields off Brazil’s coast, then refines, transports and sells the products.

The company runs three main businesses: exploration and production, refining and logistics, and gas and low-carbon energy. The pre-salt fields in the Atlantic are its crown jewel, among the most productive offshore oil provinces in the world.

Who owns it

The Brazilian federal government is the controlling shareholder, holding just over 50% of the voting shares. The rest is split between Brazilian and foreign investors, with institutional holders owning about 23% of the total.

This dual structure matters: the state calls the strategic shots, while minority shareholders still receive large cash dividends. The free float trades actively on the B3 exchange in São Paulo and through American depositary receipts in New York.

Who runs it

Magda Chambriard took over as chief executive in May 2024, after a career at Brazil’s oil regulator and in engineering. She replaced Jean Paul Prates, who was dismissed by the board after disputes over dividend policy and investment direction.

The board chair is Pietro Mendes, who also serves at Brazil’s Ministry of Mines and Energy. The chief financial officer is Fernando Melgarejo.

The leadership sits at the intersection of government priorities and shareholder expectations.

The money, in plain words

Petrobras keeps about 24 cents of profit from every real of sales – a net profit margin of 24.3%, unusually high for an oil company that also refines and sells fuel. For every real owners have invested, it earns about 30 back a year – a return on equity of 30.3%.

The company trades at a price-to-earnings ratio of just 5.3, meaning investors pay about R$5.30 (US$1)for each real of annual profit. The dividend yield is 6.8%, so a R$100 (US$19)investment returned about R$6.80 (US$1)in cash over the past year.

Petrobras carries significant debt – about R$383.9 billion (US$73.4 billion) – but also holds R$35.6 billion (US$6.8 billion) in cash. Its total assets are R$1.22 trillion (US$234 billion), against total liabilities of R$805.5 billion (US$154.1 billion).

Revenue has been volatile. Sales reached R$497.5 billion (US$95.2 billion) in the most recent full year, down from R$490.8 billion (US$93.9 bn) a year earlier, while net profit tripled to R$110.1 billion (US$21.1 billion) from R$36.6 billion (US$7.0 bn).

What it is doing now

Petrobras is pressing ahead with exploration at new offshore frontiers, including a hydrocarbon discovery off the coast of Amapá in northern Brazil. It is also expanding production from the pre-salt fields that already anchor its output.

The company is investing in lower-carbon fuels, such as marine fuel blended with biodiesel and sustainable aviation fuel. These moves aim to keep Petrobras relevant as the world shifts toward cleaner energy, without abandoning its core oil business.

What to watch

The biggest question is how the Brazilian government balances its role as owner with the company’s profitability. Dividend policy has already caused leadership changes, and future disputes could resurface.

Oil prices remain the other key variable. Petrobras earns most of its profit from producing crude, so a sustained drop in global prices would squeeze revenue, profit and the dividends that shareholders have come to expect.

This is news, not investment advice.