By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Brazil’s beleagured state-run oil company Petrobras registered a surprising surge in their latest earnings report on Friday, August 3rd, with net second quarter income soaring to US$2.68 billion (R$10.072 billion), up three thousand percent from the US$84 million (R$316 million) in the same period last year.

Brazil,Petrobras will have to pay over US$622 million for breach of contract with foreign company
Brazil’s state-run oil company Petrobras announced sharply higher net profits for the second quarter of 2018, photo courtesy of Agencia Brasil.

Overall, the first half of 2018 for Petrobras has been impressive with the company posting its biggest profit since 2011. First half net income reached US$4.54 billion (R$17.033 billion), 257 percent higher than the first half of 2017.

Analysts point to rising crude prices as one of the factors that have boosted Petrobras’ earnings in 2018. In an earnings call, the company revealed that oil prices averaged US$74.35 per barrel during the quarter, a significant increase from the average of US$49.83 a barrel a year ago.

Other factors that have contributed to the company’s sharp increase in net profits include the depreciation of the Brazilian real, lower interest expenses due to debt reduction, and lower general and administrative expenses and equipment idleness.

Friday’s earnings report comes just two months after Petrobras president Pedro Parente, who led the company for two years and helped turn it around after the huge corruption scandal, resigned in early June.

Parente’s resignation came shortly after a pair of high-profile work stoppages. The nationwide truckers’ strike brought the country to a standstill and forced the government to cut diesel prices.

A few days later, Petrobras employees went on strike demanding an end to the fuel price policy that allowed prices to be dictated by the market and international crude oil benchmarks.

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