In his last interview before his arrest on Wednesday morning, Brazilian billionaire banker André Esteves gave no hint of any impending trouble. “We are in a tough moment,” the relaxed Continue Reading
A broad investigation into corruption at Petrobras , Brazil ’s state-owned oil company, widened on Wednesday with the arrests of a sitting senator and a billionaire investment banker who is Continue Reading
The company has yet to reach its lofty production targets. Instead, Petrobras attained a more dubious title: the world’s most-leveraged oil company, with $127.5 billion in debt as of Sept. 30. Now, the bill is coming due. Loans of nearly $24 billion mature in 2016 and 2017. Investors and analysts are fretting about what’s next: repayment, restructuring or default. “I’ve had calls from investors in every time zone around the world,” said Sarah Leshner Carvalho, an analyst at Barclays. “There is almost no geography not involved in Petrobras bonds.” The company’s strategy of loading up on dollar-denominated debt has backfired as both the local currency and the price of oil have plunged over the past year. Last week, Petrobras reported that its total debt at the end of the third quarter was up 44% from the end of 2014 in local-currency terms to 506.58 billion Brazilian reais. That is […]
RIO DE JANEIRO—Growing friction between the chief executive of Brazilian state oil company Petróleo Brasileiro SA PBR -1.34 % and its board is threatening to hamper the company’s efforts to shore up its finances, people familiar with the matter said. An oil-workers strike launched Sunday has shut down up to 13% of Petrobras’s daily crude production , crimping the company’s already weak cash flow. In addition, continued upheaval in the boardroom is raising fresh concerns about a leadership vacuum as the company struggles to pare a mountain of debt. On Tuesday, Clovis Torres, a board member standing in for Chairman Murilo Ferreira—who took an unexplained leave of absence in September—abruptly resigned for “personal reasons,” the company said. Another director, union leader Deyvid Bacelar, who was elected to represent Petrobras employees on the company’s board, was arrested during a small protest as part of the strike on Monday and briefly […]
The Petrobras logo is reflected in the window of the company’s headquarters in Sao Paulo April 23, 2015. A four-day strike at Petrobras gathered steam on Wednesday, cutting crude and natural gas output from the No. 2 South American oil producer and threatening to become the most disruptive walkout at the state-run oil company in 20 years. On Wednesday, Petroleo Brasileiro SA, as Petrobras is formally known, said in a securities filing late Wednesday that oil output in Brazil was about 140,000 barrels a day, or 6.5 percent below pre-strike levels of about 2.1 million barrels a day. Using contingency plans management restored production that was cut by as much as 273,000 barrels a day, or 13 percent below pre-strike levels on Monday, and by 178,000 barrels a day on Tuesday, or 8.5 percent below levels before the strike began Sunday, Petrobras said. The strike is having a "significant" […]
A 4-day strike against Petrobras gathers steam, cutting crude and natural gas output from the oil producer and threatening to become the most disruptive walkout in 20 years. RIO DE JANEIRO, Nov 4 (Reuters) – A four-day strike against Petrobras gathered steam on Wednesday, cutting crude and natural gas output from the No. 2 South American oil producer and threatening to become the most disruptive walkout at the state-run oil company in 20 years. Petroleo Brasileiro SA, as Petrobras is formally known, is expected to continue to report significant output cuts after new offshore units were affected by the strike, which began on Sunday. On Monday Petrobras said it had lost 273,000 barrels a day of crude output, or about 13 percent of its Brazilian output. It has made no formal estimate for output since then. The cuts have already caused the biggest strike-induced hit to Petrobras’ crude output […]
Brazil’s daily oil production has fallen by about 500,000 barrels as oil workers strike for the third day to protest austerity measures by state-controlled Petroleo Brasileiro SA that are resulting in job losses, the country’s main oil union said Tuesday. Output from the Campos Basin is down about 400,000 barrels a day with 25 offshore platforms completely shut and another 8 units pumping at reduced levels, Francisco Jose de Oliveira, head of communications for the FUP oil union, said in a telephone interview from Rio de Janeiro. Production has declined at other regions, including Espirito Santo and Bahia, Oliveira said, adding that the union doesn’t have any immediate plans to meet with Petrobras management. Petrobras and the National Hydrocarbons Agency, the oil regulator known as ANP, declined to comment on the impact the strike has had when contacted by e-mail. The ANP said there is no risk of fuel […]
Oil majors had big plans for Brazil, but you can’t tell by looking at the country’s offshore drilling these days. After crude was first struck in the pre-salt formation in the seas off Rio de Janeiro, producers including BP Plc and Total SA were ready to flock to Brazil with billions of dollars in investments. For the country, it appeared to augur an unprecedented era of oil bounty. Nine years later, the promise remains unrealized: Spain’s Repsol SA and China Petrochemical Corp. are the only foreigners operating an offshore drilling rig. So what happened? While the crude-price collapse and an ongoing graft probe are part of the story, Brazilian officials who failed to auction enough exploration licenses and slowed approvals with miles of red tape were also major contributors to the boom that never came to be, according to Joao Carlos de Luca, a member of the IBP lobby […]
Summary Mexico’s first attempt to open up its oil industry to foreign companies was a failure. Its auction only attracted $2.6 billion in potential investments, compared to $17 billion maximum potential. Brazil had a similar failure more recently, with only 10% of its blocks being auctioned receiving viable bids. These latest failed auctions, coupled with other facts point to a permanent peak in oil production at current prices, which is unfolding presently, which will only reverse once prices rise. By far the most spectacular and talked about trend since the oil price collapsed more than a year ago, is the dramatic decline in drilling that occurred in the United States since the beginning of this year. For many months, we have been hearing about the resiliency of the shale industry, fueled by the delay in reaction of the industry in response to declining prices. At first, there was a […]
Brazil just held an oil and gas auction, and judging by the results, few companies are interested in developing the country’s oil and gas reserves right now. The state-owned oil company Petrobras, which is still reeling from the corruption scandal, did not participate in the auction. The unusual absence was due to the company’s massive pile of debt. Petrobras has limited resources to throw around these days, and it can ill-afford to take on new projects that would require large capital expenditures upfront, with payoff somewhere down the road. However, there was scant interest from international oil companies as well. Brazil’s oil auction failed to attract any oil majors, including Royal Dutch Shell, Total, Statoil, ExxonMobil, or BP, all of which either have a presence in Brazil or were registered to bid in auction. Out of the 266 onshore and offshore blocks that were put up for bid, only […]
