Awash in Money Brazil’s Petrobras to Issue US$ 60 Billion of New Stock

Petrobras' Piranema Petrobras, Brazil’s government-controlled oil and gas multinational, will issue as much as US$ 60 billion of new stock, most of which will go to the government in exchange for oil rights, Brazilian minister of Energy Edison Lobão announced March 16.

“Petrobras has no funding problems,” Lobão told reporters in São Paulo. He said the company will issue between US$ 40 billion and US$ 60 billion of new stock. “The share sale will help us to diversify our funding sources”.

Brazilian President Luiz Inácio Lula da Silva sought to boost state control over Petrobras and deepwater oil deposits after the company discovered the Americas’ largest oil find in more than three decades. Under legislation proposed by Lula, Brazil’s government is seeking to swap 5 billion barrels of oil in the pre-salt region for Petrobras shares.

Petrobras is spending 174.4 billion USD in the next five years as it prepares to tap the offshore fields. The company’s Tupi field, the biggest discovery since Mexico’s Cantarell since 1976, may hold as much as 8 billion barrels of oil, Petrobras has said.

Lobão stated the Senate will likely approve the oil-rights transfer within two months, allowing Petrobras to sell shares by the end of June.

Lobão’s estimate tops previous forecasts. Luciano Coutinho president of Brazil’s state development bank, known as BNDES, said March 3 that Petrobras may raise US$ 35 to US$ 40 billion.

Credit Suisse, in a February 10 note to clients, forecast the share sale to reach as much as US$ 50 billion. About US$ 30 billion of the stock would go to the government in exchange for the oil with the rest offered to minority shareholders, according to Credit Suisse.

In related news, Petrobras said on Tuesday it found light oil in a well off the coast of Sergipe state, part of an ongoing strategy to search for more crude in its existing production blocks.

The company said in a regulatory filing it found oil in the 3-PRM-12-SES exploratory well in the northern edge of the Piranema block, 28 kilometers off the coast of Sergipe. Petrobras estimates the well has 15 million barrels of recoverable oil, the equivalent of about one week of its domestic crude output.

The Brazilian National Petroleum Agency said that the discovery was made at a depth of 813 meters and that the well produced API 44 degree crude. The company plans to drill a second well and do further evaluations of the new oil accumulation. The Piranema field was declared a commercial find in August 2004.

Mercopress

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil Will Be the US of This Century, Says Lula

Brazil’s President Luiz Inácio Lula da Silva reiterated the importance of integration among the ...

Digital and Free Internet Coming Soon to Brazilian TV

High definition image, digital sound, stable signal, interactivity, multiple channels, and the possibility of ...

Latin America Takes 25 Years to Reduce Poverty to 1980’s Level

From 2002 to 2005, the Latin American countries presented the best performance in income ...

US Business Council Urges Brazil and US to Resume Collapsed WTO Talks

The president of the United States Council for International Business, Peter M. Robinson, issued ...

Greepeace: GM Soybean in Brazil Is Illegal and Absurd

Greenpeace considers “absurd” the promulgation of the third provisional measure (Medida Provisória – MP) ...

Sí£o Paulo, Brazil, 451 Today, Is an Ethnic Powerhouse

The city of São Paulo celebrates today 451 years of history. From the school ...

Most Adopted Children from Brazil Go to Italy

Over the last two decades, some 12,000 Brazilian children have been adopted by foreign ...

Brazil Abolishes 42-year-old Press Law Adopted During Dictatorship

Brazil's Supreme Court voted by seven votes to four to end a repressive press ...

WHO Denounces: 46 Million Have No Sanitation in Brazil

According to the World Health Organization (WHO) and UNICEF, which yesterday, September 5, published ...