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:

You May Also Like

Among World’s Top 500 Companies, Five Are from Brazil

Five Brazilian companies made it into the ranking of the world’s 500 biggest companies ...

LETTERS

By Brazzil Magazine I am very concerned for the safety, health, education, civil rights, ...

With Bush Part 2, Nothing Changes Re: Brazil

The United States Ambassador to Brazil, John Danilovich, said today that with the reelection ...

Brazilian Congress’s Windows, Computers and Furniture Smashed by Protesters

Hundreds of landless farm workers in Brazil briefly invaded the lower house of parliament ...

Brazil’s Ronaldinho Player of the Year Again. Kakí¡ Gets Prize Too

Brazilian football star Ronaldinho has been named FIFPro world player of the year for ...

POR AÍ

Irreverent, sensual without being crass, author Joyce Cavalcante has focused her writer’s eye on ...

In Brazil, Men, It Seems, Will Be Boys Forever

The role of the family in Brazil cannot be overstated. Devotion to one’s family ...

Brazil’s Petrochemical Braskem Gets Net Half a Billion Dollars Thanks to Exports

Braskem, a Brazilian company that is the leader in the production of thermoplastic resins ...

Hundreds of Brazilian Veterinarians Get Training for Bird Flu Handling

Approximately 420 veterinarians from Brazil’s Ministry of Agriculture, Livestock, and Supply (MAPA) and state ...

RAPIDINHAS

The ownership deeds for thousands of rural properties in various Brazilian states were revoked ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`