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Petrobras Case Study

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5. NOCs: What are they? 5.1 Why do they Exist? 5.2 Why maintain a NOC? 5.3 NOC and Government Interaction 4.3.1 The Situation in Brazil and Petrobras 6. Strategy: Why are Petrobras so successful? 6.1 Being a state monopoly 6.2 The beginning: A very performant downstream segment 6.3 Oil abundance: The offshore fields 6.4 The market gets deregulated 7. Performance 7.1 Acting as a Monopoly 7.1.1 The Benefits 7.1.1.1 The minimization of risks 7.1.1.2 The technological advantage 7.1.1.3 The inforamtional advantage 7.1.1.4 Cash Flow 7.1.2 The Drawbacks 6.1.2.1 A political interference 8.2 The principal vs Agent: The performance depends on the governemnt 8.2.1 The principals view 8.2.2 The agents view 8.2.3 Evaluation 1. Introduction Petrobras stand out as a particularly successful national oil company. It is one of the world leaders in deep-water exploration and production. Furthermore, it has established itself as the dominant force in the Brazilian hydrocarbon market and its presence aboard is steadily growing. The company’s market value grew from $26.4 billion in 2000 to a high of $173.6 billion in August 2009 and it is currently the largest publicly traded company in Latin …show more content…

Oil experts were generally quite skeptical to the new firm seeing as, at the time, Brazil were not believed to have had any meaningful oil reserves nor the expertise of the industry. These facts however were beneficial to Petrobras for the following reasons: a) the company was not founded among oil riches and could therefore rely on fiscal subisidies for the first 20 years of its operation b) it started its operations with low revenues and as a result it learnt how to rationally select projects in order to guarantee cash flow demanded by its investment program (De Oliveira

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