Petrobras (Brazil's state-run, Soros invested oil company).... $64.5 Billion stock sale 'to fund exploration'.

Stuff like this doesn’t just happen in a day – like a light bulb out of nowhere all of a sudden switching on over the board of directors’ heads.

It takes time – a whole bunch of time – to run up “change” at this level.  I truly “hope” you realize that.


Two reports.

First up, Agence France Press (AFP) via The Age (Australia).

Brazil’s Petrobras unveiled one of the world’s biggest share offerings, a sale of up to 64 billion US dollars in new stock to finance oil exploration aimed at turning Brazil into a leading oil exporter of the 21st century.

The transaction could be expanded to 74 billion US dollars if there was heavy demand, the state-run company said.  The cash serves as the core of an ambitious plan Petrobras has already outlined to boost capital expenditure over the next five years to 224 billion US dollars as it seeks to tap potentially vast oil reserves discovered recently off the coast of Rio de Janeiro.


The second report is from Reuters.

Brazil’s state-run oil company Petrobras (PBR.N) plans to sell as much as 111.63 billion reais ($64.52 billion) worth of shares in a primary offering, raising funds in one of the world’s largest ever stock sales.

The company will offer 1.59 billion new preferred shares (PETR4.SA) and 2.17 billion new common shares (PETR3.SA), Petrobras said in a statement published in Valor Economico newspaper on Friday. (Reporting by Elzio Barreto) ($1=1.73 reais).


Now then…….. About halfway through the AFP article, there’s this: “But to get at the black stuff, Petrobras will have to overcome a series of costly technological challenges unprecedented in the oil industry. The company, a world leader in deepwater oil exploration, is confident it will be able to do so.”

No other article about the stock sale I found except the AFP releases even hints at where this ‘$64+ Billion for exploration’ will be spent.

Deep water experts, eh ?

To use the vernacular, I ‘did some digging’ into the recent past……. It’s not deepwater drilling they’re doing – it’s called ‘Ultra-Deepwater Drilling’ – at least 7,500 ft of ocean and mostly much deeper where Petrobras is going to drill.  Waaaaay down deeper than the Deepwater Horizon of “evil capitalists killed the Gulf” fame.

Have a go at these bits of business………..

In July of 2008, Petrobras signed a ten year contract (+ a ten year extension option) with Transocean to provide a UDW rig that will be built in South Korea by Samsung………… “variable deck-load of over 20,000 metric tons and the capability of development and exploration drilling in greater than 10,000 ft of water depth, upgradable to 12,500 ft of water depth and 37,500 ft of total drilling depth with additional equipment.”

September 11 2009 – Petrobras leasing and/or buying 28 more rigs just like it.

Petroleo Brasileiro S.A (Petrobras) announced that its executive board has approved the strategy to hire up to 28 new drilling rigs to be built in Brazil, with increasing national content, and to be used for ultra-deep water exploration, including the fields located in the pre-salt layer. The rigs are slated to be delivered between 2013 and 2018. A first phase foresees the hiring of a minimum lot of nine rigs.

George Soros had dang near $1 billion invested in the company already, then lo and behold, YOU made a $2 billion investment into Petrobras during August of last year from The Wall Street Journal……

The U.S. is going to lend billions of dollars to Brazil’s state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil’s planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.

The U.S. Export-Import Bank tells us it has issued a “preliminary commitment” letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount.


Heh…. Loan…. I like that…. Makes me chuckle.

Makes me laugh almost as much as watching people not seeing the big picture in all this madness.

Y’all have a nice day now, ya hear ?

Cheers !

Kenny Solomon

At the range with some very special paper targets.

Cross-posted at T.A.S.G.

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