American depositary receipts of Petrobras rose 1.3% in early-afternoon trading on high volume.
Petrobras said it will pay Brazil $42.5 billion in new stock in exchange for being allowed to develop 5 billion barrels of oil in offshore fields below the Atlantic Ocean, off the coast of Rio de Janeiro.
S&P Equity Research upgraded the firm's U.S.-listed shares to buy from hold. It said even though Petrobras' stock-for-oil deal came in at the high end of expectations and is likely to add near-term pressure to its stock, the deal is still viewed in a positive light because of its strong long-term growth potential.Petrobras' offering is one of the largest stock offerings this year, and is part of its overall plan to invest $224 billion by 2014. The deal is expected to close Sept. 30. Petrobras investors such as billionaire George Soros, BlackRock (BLK - Get Report) and Banco BTG Pactual have been part of a recent sell off in Petrobras shares, Bloomberg News reported. Elsewhere in the energy sector, shares of Mariner Energy were among the most widely-traded shares on Thursday after a fire broke out on an offshore platform it owns in the Gulf of Mexico, a region still reeling from the aftereffects of the catastrophic BP (BP - Get Report) oil spill. Early reports of the explosion seemed to be either mistaken or exaggerated. Workers were sandblasting the platform when the fire occurred, and production had been halted.