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Petrobrast From The Past
Four years ago, bankers, politicians, and traders were patting themselves on the back after Petroleo Brasiliero (Petrobras) raised a stunning $70 billion in the world's largest share sale, as Bloomberg reported at the time, investors bet on its plans to double output within a decade by tapping offshore fields. Things haven't worked out so well...
Bloomberg, Sept 24th 2010: Petrobras Raises $70 Billion in World's Largest Share Sale
Petrobras, based in Rio de Janeiro, sold 2.4 billion common shares for 29.65 reais each and priced 1.87 billion preferred stock at 26.30 reais apiece. The company sold 115 billion reais ($67 billion) of shares and banks have an option to buy another 5 billion reais, according to a statement sent late yesterday.
Petrobras is spending about $224 billion over the next five years to boost production to 5.38 million barrels a day by tapping deposits trapped under a layer of salt beneath the ocean floor. The share sale was priced at a 2 percent discount to yesterday’s close, suggesting investors are backing Petrobras’s plans to overtake industry rivals such as Chevron Corp.
...
“Given Petrobras’s superior asset base and growth profile versus global oils, we believe the stock should trade at a premium relative to peers,” Bank of America analyst Frank McGann said in a note to clients.
and now...
Bloomberg, Nov 16th 2014: Rousseff Says Petrobras Probe to Forever Alter Brazilian Society
The investigation of corruption at state-run oil producer Petroleo Brasileiro SA (PETR4) will permanently change Brazil, President Dilma Rousseff said.
“It will forever change the relationship between Brazilian society, the Brazilian government and private companies,” she told reporters today at the summit of the Group of 20 nations in Brisbane, Australia. “This will end impunity. This, to me, is the main feature of this investigation.”
Police found evidence that at least seven construction companies formed a cartel to win public contracts, including a combined 59 billion reais ($23 billion) in orders from Petrobras as the state company is known, officers including Commissioner Igor Romario de Paula said last week in Curitiba, where the case is before a judge. They declined to name the alleged cartel members.
While the government says the investigation won’t put a stop to the company’s work, it has put pressure on Rousseff’s administration just weeks after she won re-election in the closest race since at least 1945.
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The scandal spread to Petrobras earlier this year after investigators uncovered ties between Paulo Roberto Costa, the company’s former head of refining, and a black-market money dealer.
Bloomberg, Nov 17th 2014: Petrobras Bonds Decline With Brazilian Builders Amid Graft Probe
Petrobras’s $3.5 billion of 2023 notes dropped 1.3 cents to 88.25 cents on dollar, the lowest level since Jan. 31, after saying last week that it would release unaudited third-quarter results on Dec. 12, a month later than originally scheduled.
“Recent scandals surrounding Petrobras’s contracting practices could have a negative implication for the company’s effectiveness in negotiating with equipment suppliers as its executives will likely exercise incremental caution when signing or amending contracts,” Fitch Ratings analyst Lucas Aristizabal wrote in an e-mailed report today. “Petrobras’s credit quality will deteriorate if the ongoing corruption investigation results in monetary penalties or loss of assets.” Fitch rates Petrobras at BBB, the second-lowest level of investment grade.
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Things are getting ugly fast...
- *FITCH SOLUTIONS: PETROBAS' CDS NOW AT WIDEST LEVEL SINCE 2009
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They should diversify into brassieres.
so they had a perfect timing to raise money....?
It's going to get real fun when they figure out how many were on the take.....
http://www.youtube.com/watch?v=j8CcTYsMHYU
Petrobribe
Is there anywhere on the globe not awash in public/private corruption? I will wait....
Antarctica
the penguins run a pretty tight ship
The money was raised under the guise of drilling to reach unlimited amounts of oil deep offshore.
How's that workin' out folks?
aka slippery nipples
"Petrobras is spending about $224 billion over the next five years to boost production to 5.38 million barrels a day by tapping deposits trapped under a layer of salt beneath the ocean floor"
hhmm, sounds like one of those deals where profitable only if oil priced $90/barrel or above.
uhh, what's the price of oil again??
Priced in what? Be specific.
Bitcoins
Yep, this is real deep water drilling that costs a lot to bring in and the break even is likely higher than $90.
Petrobras only exists to make the folks at BP look like geniuses...
"Things haven't worked out so well..."
No pun intended?
Still waiting for the PetroRubel. or the GoldRubel.
And unless/until the GoldRubel comes online, Russia will want to make challenge USSA on their respective Gold Reserves, relative to Foreign Debt and National GDP. If the GDP of USSA is 8x of Russia, then its gold reserves need to be 8x also.
IOW: Prove that yours is 8x longer, or the world will not believe in the GRC status of the USD much longer. Especially if the USD is backed by oil (Petrodollar), but oil prices keep falling. If all that fiat "Liquidity" (fiat Debt) has to be soaked up by a depreciating Oil, then the supply of Liquidity must remain in lock-step. Doesn't anybody do frikkin Math any more? Or is doing Meth good enough, if you're a Central Bankster?
Major corrupt company in a major corrupt country.
Sound familiar? Crony Capitalism sub tropic style.
They are not corrupt
They fucked the system Yankee style
Just good business - grow up!
In related news...China opens a $4.2T Stock* Market to the World, in Hong Kong.
Given that they are on a break-neck speed to sign a series of bilateral currency deals/swaps with BRIC and Western countries, have a PM Market in Shanghai, and now what will be a giant Stock & Bond market, it means that soon China (an many others) will no longer accept the USD as the GRC. It also means that the CNY becomes a Defacto RRC (Regional Reserve Currency).
IOW, they will no longer be buying Petrodollars to buy Oil or Gold on the world markets. When that happens, the show's over for the USD. All those Dollar will be coming back to USSA. Can you say Inflation? Yo, Wall St and Inner City bitchez, prepare to have your Welfare EBT to be 'Declined'.
* http://rt.com/business/206235-china-hong-kong-stock/
Jim Grant discusses Petrobras $139 Billion debt here http://video.foxbusiness.com/v/3895523672001/james-grant-on-pertrobras-s...
Thanks for that link, Jubber!!