Petrobras, the Brazilian oil giant, has discovered world-class oil fields, estimated to contain in aggregate some 80 billion barrels of oil, in the deepwater offshore Brazil. Developing the reserve will be expensive, as the deposits are located beneath 2,000m (6,600 ft) of water and 5,000m (16,400 ft) of sediment, including a thick layer of salt. The company plans to spend $29 billion through 2013 to develop the portion of the “pre-salt” basin it already controls.
Financing? No problem. The Obama Administration, through the U.S. Export-Import Bank, has agreed to provide up to $10 billion in loans to Petrobras to help pay for the development, according to Brazilian Planning Minister Paulo Bernardo da Silva. The China Development Bank has agreed to supply a similar credit line, repayable in barrels of oil in lieu of cash.
When a lender structures a loan to be repaid in barrels, it represents a speculation on the price of oil as well as a bet on being repaid.
The Brazilian government is the controlling shareholder of Petrobras, but shares trade on several exchanges, including New York (symbol PZE). The company operates in 27 foreign countries, including the U.S. in the Gulf of Mexico.
Which begs the question: Why is the American President willing to risk $10 billion on the success of a Brazilian oil venture, while giving every signal that he wishes the American independent producer would just shrivel up and die?
Is it because we vote Republican?
H/T Kari Scott, CRC Public Relations
Moe Lane
Steve Maley
Dan McLaughlin
Neil Stevens
Daniel Horowitz
Yes Why cant they help our producers
oklahomajon Friday, August 7th at 6:27AM EST (link)Because they hate the idea of american oil .If Congress would get off their duff snd allow us to go after Alaksan oil in the National Wildness that would make perfet seed money but no we have to help FOREGIN OIL COMPAINES get the good.
Easy Question
abbynormal Friday, August 7th at 8:07AM EST (link)Remember when Brazil’s President Luiz Inácio Lula da Silva blamed the global economic crisis on “white people with blue eyes” and said it was wrong that black and indigenous people should pay for white people’s mistakes?
And remember when, while on his Latin American Apology Tour, Obama firmly shook da Silva’s hand and said “This is my man right here. I love this guy. The most popular politician on earth.”
Well, now you know why we gave Brizill $10B
George Soros owns 32 million shares of Petrobras
katesmith (Diary) Friday, August 7th at 5:06PM EST (link)As of June 2009 report says he still owns 32 million shares valued at almost $1 billion. Sometime around May he sold 5 million shares leaving him with 32 m. Petrobras is one of the largest if not the largest holding in Soros Fund Management, per article earlier this year. I assume whatever goes on benefits the Soros family.
I thought Obama wanted to invest in "green" technology
izoneguy (Diary) Friday, August 7th at 5:32PM EST (link)And that oil development is evil????
Obama shows his hand here.
The point cannot be made often enough: Modern liberalism, as embodied in the Obama presidency, is the defender of the status quo. And the status quo is a road to economic ruin. Political forces cannot redistribute the wealth that the economic system does not produce.