News about Petrobras

On October 29, Petrobras announced a third oil-bearing layer at its Morpho well in block FZA-M-59 in the Foz do Amazonas basin, the third oil find at the same well after results in August and early October, and said drilling and geological data collection are complete. The well lies about 175 km off the coast of Amapá, with a planned final depth of about 7,237 m measured from the sea surface, and drilling began on October 20, 2025. Petrobras has not disclosed reserves, but Brazil's government energy research agency EPE estimates the northwest of the basin holds about 6.2 billion barrels of oil equivalent recoverable, with total potential of up to 10 billion barrels of oil equivalent. Petrobras will not produce from Morpho immediately and plans to drill three more wells in the area to assess whether commercial production is viable.

Petrobras ADRs (PBR) fell 16.63% and PBRA 18.27% on Monday, joining a rout in Brazilian stocks after President Luiz Inácio Lula da Silva beat conservative challenger Flávio Bolsonaro 51.8% to 48.2% in the runoff, a result that surprised investors who had expected a Bolsonaro win. Bolsonaro is refusing to concede and alleges the administration suppressed votes in key districts, while nearly all other Latin American leaders have congratulated Lula, with only Argentine President Javier Milei holding back. The article notes that since 2023 Lula has placed government control at the center of energy policy, imposing price controls on domestic fuel sales, ending privatization of Petrobras's assets, and ordering the company to expand production and favor capital investment over dividends. These moves may look negative in the short term but could pay off over the longer term, and Petrobras shares trade at 6.6x trailing earnings.

Luiz Inácio Lula da Silva won Brazil's presidential runoff for a fourth term, a result many investors had not positioned for, and Senator Flávio Bolsonaro has not conceded. Nu Holdings fell 25% to $11.30, Petrobras dropped 21% to $20.54 and MercadoLibre slid 15% to $1,545, while the iShares MSCI Brazil ETF (EWZ) lost 28% to $30.66 and the SPDR S&P 500 ETF Trust (SPY) rose 0.3% to $762.13. The article links Nu's drop to fears of higher taxes and tighter regulation on Brazilian lenders, Petrobras' to possible state intervention, fuel-price controls, taxation and dividend policy, and MercadoLibre's to Brazil being its largest market. Watch points include how quickly Lula's government outlines its fiscal repair plan, new tax measures on financial services, and MercadoLibre's quarterly report expected in early November, though the date is unconfirmed.