Income · Stocks to Consider and Updates

Total and Petrobras Establish Partnership

TOT  French oil and gas giant Total, SA (NYSE: TOT – $48.85) and Brazil’s Petroleo Brasileiro (Petrobras ), have reached an agreement to set up parameters for upstream and downstream activities in Brazil, in addition to other international opportunities. The two companies said the first area of focus will be on upstream (oil and gas exploration and production) businesses. In downstream (refining and marketing), they will be working to develop joint activities in the gas and power generation in Brazil. The two companies currently operate 15 total consortiums, with nine in Brazil and six international. The new partnership will allow both companies to combine their experience and expertise in deep water development to optimize production and jointly develop a strategic area of activity in Brazil and in other high potential oil and gas-rich areas. The two firms will share costs and associated risks in the projects, which often involve high investment and complexity.

       Total, like virtually all other integrated energy companies, are struggling with persistently low oil prices. However, those with a need for income and willing to maintain a long-term investment horizon, may find these high-quality ADRs appealing from a total return perspective. The depressed shares are ripe for recovery and yield 5.6%, at current levels.



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