NEW YORK (TheStreet) -- Brazil may allow companies other than Petrobras (PBR) - Get Report (PBR.A) to produce oil from areas it originally sold to the state-run company in 2010, Energy Ministry head of exploration and production policy Jose Botelho said on Wednesday, according to Reuters.
The country had been open to outside development until 2007 when then-president Luiz Inacio Lula da Silva and later ousted presidentDilma Rousseff "took back much of the state's monopoly," CNBC's Brian Sullivan said on "Power Lunch" on Wednesday afternoon.
"It's a bit of a U-turn for the company," he added.
Petrobras is probably having to reopen oil production to outsiders because of financial problems, CNBC's Michelle Caruso-Cabrera noted.
"They got greedy. I mean you could probably time the decision that they wanted Petrobras to do everything in the oil sector to back when oil was about $1.40. Remember those days? They were just going to be the dominate player," she said.
The numbers back up her theory, Sullivan noted. Brazil took back its monopoly in 2007, and Petrobras shares peaked in early 2008 at $71 before sinking to $9 today, he said.
"So that will spark action hopefully," he added.
This is a smart move for Brazil because it could benefit from foreign investment, Caruso-Cabrera said.
"They need the expertise. They don't have it. Everything runs behind schedule, over budget. It's been almost an epic failure," she said.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings team rates Petrobras as a Sell with a ratings score of D+. This is driven by a number of negative factors, which the team believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks the team covers.
You can view the full analysis from the report here: PBR