NEW YORK (TheStreet) -- Petroleo Brasileiro Petrobras SA (PBR) announced that profit at the Brazilian oil company could be lowered by $15 billion between 2014 and 2018 if the company has to suspend its oil platform contracts with SBM Offshore NV (SBFFF), Reuters reports.
The possible reduction in profit is based on the company's estimation of how much oil and natural gas output it would lose, and the increase in spending the company would need it if had to stop using the oil production platforms it's leasing from SBM.
Petrobras came up with the hypothetical figure as it may have to halt its operations with SBM.
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The Holland-based company is currently under investigation in Brazil, the U.S., and the Netherlands regarding allegations SBM paid $250 million in bribes in South America and Africa, and $139 million in bribes in Brazil, Reuters added.
Shares of Petrobras are down -0.14% to $14.47 in mid-morning trading on Monday.
Separately, TheStreet Ratings team rates PETROBRAS-PETROLEO BRASILIER as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PETROBRAS-PETROLEO BRASILIER (PBR) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow."