Your author read this report this morning from Mercopress and his memory was jolted. Here's how the note kicks off:
Tuesday, July 26th 2011 - 13:29 UTC
Petrobras plans to double oil output by 2015 and exit debt market in 10 years
Brazil’s government managed Petrobras said its plan to more than double oil output will boost cash flow and eliminate the need to tap debt markets after about 10 years. Profits from oil sales will be enough to cover operating and debt costs starting in about 10 years, said Chief Financial Officer Almir Barbassa.
For sure that sounds smart cos going overboard with debt and all that isn't a good thing, correct Mr. Obama? But the flipside to that is a Petrobras (PBR) that's not going to care much about bottom line profits while it gets its burden lowered. Which reminded me of these words posted in 2008 and then August of 2009 by yours truly:
"It's at this point the plain, boring, simple fact that Petrobras is a state run company needs emphasizing. Bottom line results are not the be-all-and-end-all of PBR's corporate philosophy. Never have been and never will be. Do you honestly believe that the company will continue to pay enormous dividends to foreign shareholders while at the same time taking out massive debt lines to pay for the capex? If so, you are in for a rude awakening.
"So I'm still neutral on Petrobras stock. I'm reasonably bullish on the company and what it will do for Brazil in the long term future, but because shareholders are not the raison d'etre of PBR there's no reason why you or I should prefer it over CVX, COP, XOM or whatever other big oil strikes your fancy."
The original piece was entitled, "Petrobras: Great for Brazil, not so great for shareholders". So check how PBR has done in relation to big world oil plays like XOM and COP on that chart above and consider that a dumbass spoutmouth blogger got it right while the dude in NYC that got his new Porsche funded by you was insisting on the utter future crunchy wonderfulness of PBR all that time. And DYO freakin' DD one time.