Brazil and Mexico, Latin America’s two biggest economies, are engulfed in high-profile scandals that have involved their presidents and also touched on investor interests. So far, Dilma Rousseff has made a better fist of handling the fallout in Brazil than Enrique Peña Nieto has in Mexico – although that could easily change. Read more
Just as President Dilma Rousseff thought she had put a scandal affecting state-owned oil company Petrobras behind her, it has come roaring back, nastier than ever.
Paulo Roberto Costa, a former Petrobras executive accused of accepting kickbacks in return for contracts, has reportedly made a plea bargain with investigators that has got Brasília sweating. Read more
It’s going to be a nail-biting few days ahead for Petrobras’s investors, Brazil’s ethanol industry and anyone with a car in the Latin American country.
Next Friday at Petrobras’s board meeting, the government is set to decide on whether to increase fuel prices in the country and, more importantly, whether to keep prices in line with international levels in the future. Read more
Chinese state oil companies have inked two fresh deals in the Americas, as they continue to expand abroad to meet China’s ravenous energy demand, write Ajay Makan in London and Samantha Pearson in São Paulo.
PetroChina, China’s largest energy company by oil and gas production, said on Wednesday it would buy stakes in three Peruvian oil and gasfields from Brazilian state oil company Petrobras for $2.6bn.
Hours earlier Cnooc said it was considering building a terminal to export liquefied natural gas from the west coast of Canada. Read more
Has the Brazilian government been reading the FT’s running coverage of Petrobras’s financial woes – including this must read analysis from last week?
It must have (joke) – because just days after Petrobras head Mary Grace Silva Foster said the state-controlled oil major has sufficient funds to operate and does not need a fuel price increase, the company hinted on Friday that it could be looking to do just that. Read more
Going, going, gone! After months of hype, excitement, protests, and lawsuits, Brazil finally auctioned off its biggest ever oil discovery on Monday – the Libra field.
‘Auction’, however, is perhaps a misleading term. There was only one bidder – a consortium made up of Brazil’s state-run Petrobras (40%), Anglo-Dutch Shell (20%), France’s Total (20%), and China’s CNPC (10%) and CNOOC (10%). Read more
Cade, Brazil’s antitrust regulator, has this week revealed it is investigating the purchase of Petrobras’s 40 per cent stake in the BS-4 oil block by Batista’s oil company OGX last November.
They suspect OGX and Petrobras may have closed the $270m deal for the block in Brazil’s Santos Basin without the prior approval of the antitrust regulator.
Cade has 30 days to decide whether they have broken the law – if found guilty, the companies could be fined up to R$60m each and the transaction may be “annulled”. They may also be subject to further penalties. Read more
Brazil’s oil industry has not been the source of much good news recently but this week might just go down as one of its best yet.
On Monday, the country’s state-run giant Petrobras managed to raise $11bn in the biggest emerging markets bond issue ever. Then on Tuesday the country pulled in a record R$2.8bn ($1.4bn) in its first auction of licences for oil exploration blocks in five years. Read more
By David Gacs and Jude Webber
If rumours are true, it looks like Petrobras is about to get another top-up for its coffers.
Just two days after the Brazilian national oil company raised $11bn in the biggest emerging markets bond offering ever, market chatter is that Petrobras is poised to sell a stake in Petrobras Argentina, its Argentine subsidiary, for a princely sum of $900m. Read more
By Pan Kwan Yuk and Samantha Pearson
UPDATE: It’s official. Petrobras has succeeded in raising $11bn on Monday, making it the biggest emerging markets issue EVER.
Final pricing came in slightly lower than initial guidance thanks to strong demand from investors. Yields for the six-tranche issue ranged from 2.14 per cent for the three-year notes, to 5.76 per cent for the 30-year bonds. The total size of the issue can still increase as underwriters has a so-called “greenshoe option” to sell 5 per cent more of the bonds to Asia investors. See original BB post after the jump. Read more
“This is business, not aid.”
So said Maria das Graças Foster, chief executive of Petrobras, as she announced that the state-controlled oil major is in talks with billionaire Eike Batista’s beleaguered EBX group about a potential tie-up. Read more
Petrobras has made no secret of its wish to offload international assets. It has been trying to flog off $6bn of its Gulf of Mexico operations, although with little success to date, as part of a $14.5bn asset disposal plan that will also include refineries in Japan and the US.
Now Nigeria seems to be on the cards, according to a Reuters report, with plans to sell $5bn-worth of oil fields in the African country. Petrobras declined to comment. Read more
Do a Google search on Brazil’s oil industry and you’ll find most of the results are either related to the government or to state-controlled Petrobras. You’ll see gloomy tales about tough local content regulation and the pressures exerted on Petrobras by Brazil’s domestic price controls on petrol. Perhaps you’ll also read headlines about Chevron’s disastrous oil spills off the coast of Rio recently and the fines of $20bn it faces.
But away from the spotlight and the politics, there are hundreds of small service companies in the industry getting along just fine – if not more than fine. Read more
For international companies, Brazil’s oil and gas industry can be challenging. The national oil company, Petrobras, has been appointed the sole operator by government decree of new fields in the country’s giant new offshore reserves, known as “pre-salt”. This means all operators have to work with Petrobras, exposing them to the risk of having the same government-controlled company as a partner. They also must source certain percentages of equipment locally, potentially making field development costly.
But that hasn’t stopped foreign companies from rushing in. Read more
It is one of the more peculiar corporate stories in Latin America.
How in the world can a company like Colombia’s Ecopetrol boast a bigger market capitalisation ($128.6bn as of Monday) than its Brazilian counterpart Petrobras ($126.1bn) which produces three times as much oil and gas?
One conspiracy theory that has been doing the rounds is that Ecopetrol’s shares are being used in repo trades – where brokers and investors use the stocks as collateral to borrow money and buy even more shares, artificially inflating the price. Read more
Time for some smug smiles in Colombia, perhaps, and some gnashing of teeth in Brazil: Ecopetrol has once again surpassed Petrobras as the largest listed energy company in Latin America by market capitalisation, even though production at Petrobras is about three times bigger.
How can that be? Read more
If you think you’ve had a bad day, spare a thought for poor old Vale.
The Brazilian mining giant on Wednesday announced tax losses of nearly R$1bn ($483m) relating to cases in Brazil and Switzerland.
Early in the morning, Vale said it had settled a dispute with the Swiss authorities over what it called “differences in interpretation” of the federal tax breaks granted to Vale’s international business in 2006. While the company had already set aside $37m for the Swiss claim, it said it would now have to pay almost six times that amount – 212m Swiss francs ($232m). Read more
Shares in YPF, the nationalised Argentine oil and gas company, surged by more than 7 per cent in New York and by nearly 9 per cent in Buenos Aires on Friday morning, before backtracking a bit, after La Nación newspaper reported that Brazil’s Petrobras was selling out of Argentina and YPF could be the buyer. Read more
What price a reputation? Earning a good one takes time. Losing it can take a moment. So some of the biggest companies based in Brazil, Russia, India and China may not be pleased to read a report issued this week by RepRisk, a consultancy that calls itself “the leading provider of business intelligence on environmental, social and governance (ESG) risks”. Read more
By Claire Gordon
Shares of Petrobras fell sharply on Monday after the Brazilian state company reported a 12 per cent year-on-year decline in third-quarter net profit to $2.7bn.
The next day Pemex, the Mexican state oil company, reported a $1.9bn quarterly net profit. But progress was huge: a year earlier, Pemex reported a $6.2bn net loss. Read more