How to Invest in Oil Stocks in Brazil

Brazil has a national oil company -- Petroleo Brasileiro Petrobras SA -- which controls exploration, production, refining, and distribution of crude oil and the resulting fuel products in Brazil. Petrobras controls the oil industry in Brazil from the drill to the gas station. The Brazilian government owns about 30 percent of Petrobras, which allows the company to maintain its monopoly position in the country. In the U.S., Petrobras shares trade as American Depository Receipts -- (ADRs) on the New York Stock Exchange.

Step 1

Look up the current share price of the Petrobras ADR using its U.S. stock symbol, PBR. Shares of foreign companies listed as ADRs in the U.S. are priced, bought and sold just like the stocks of U.S. companies.

Step 2

Calculate how many PBR shares you want to buy by dividing your investment amount by the current share price.

Step 3

Buy shares of PBR in the same manner as you would buy a U.S. company stock. If you trade online, use the stock-order screen, then enter the stock symbol PBR and the number of shares you want to buy. The commission rate to buy ADR shares is the same as for regular stock shares.

Tip

  • Petrobras usually pays dividends four times a year. The amounts and times will vary. The dividend payment decision and approval process is quite complicated for Brazilian companies.
  • ADR shares are backed by company shares held in trust by a bank. The PBR trustee collects the dividend payments in Brazilian currency, reals, and converts them to dollars so that U.S. investors are paid in dollars.
  • Each PBR ADR share is backed by two Petrobras Brazilian common shares. This is important if you want to dig into Petrobras financial reports and try to convert reals per share to dollars per share.

About the Author

Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.

Zacks Investment Research

is an A+ Rated BBB

Accredited Business.