A New Zealand court has delivered some good news for oil giant Petrobras but delays tapping huge fields in Brazilian waters have led to a damning verdict on its international performance.

A bid by Greenpeace and an iwi to quash a permit granted to the Brazilian company for exploration off the East Coast was thrown out by a High Court judge at Wellington on Friday.

The applicants claimed the Government failed to meet environmental and consultation obligations under the Crown Minerals Act, Treaty of Waitangi obligations and international law.

Although an appeal is possible, the ruling will help clear an obstacle to Petrobras' work in the Raukumara Basin, although any drilling in what is frontier territory is still at least three years away. However, a Bloomberg report over the weekend finds Petroleo Brasileiro (Petrobras) is the worst investment among the world's biggest oil companies this year as Brazil's state-controlled producer suffers delays and cost overruns developing the largest oil finds in more than a decade.


Petrobras, as the world's biggest producer in waters deeper than 300m, has lost 22 per cent for investors this year in US dollar terms, the worst performance by oil companies with a market value of more than US$50 billion ($63 billion).

Petrobras slashed its 2020 production target by 11 per cent yesterday and said its developments, mainly offshore, will cost $141.8 billion, 11 per cent more than planned.

The company, based in Rio de Janeiro, has had the biggest drop in production per share over the past two years of the 10 biggest oil companies after a $70 billion share offering in 2010.

Brazil has at least 50 billion barrels of recoverable reserves in the "pre-salt fields", an area the size of Florida in deep waters off the coast of Brazil.

Independent estimates put the reserves in excess of 100 billion barrels.

In New Zealand, the company's exploration permit covers 12,333sq km where early seismic data and modelling work showed the basin had geology capable of trapping hydrocarbons in commercial quantities.

Water depths range from coastal to 3000m at its northern reaches and getting to the drilling stage will cost about $150 million.

In his ruling, Justice Warwick Gendall said claims for a judicial review failed on all counts.


Petrobras was not able to respond to questions yesterday.

- additional reporting Bloomberg