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 […]
Petroleo Brasileiro SA, Brazil’s state-controlled oil company, sat out an oil licensing round in Brazil for the first time on Wednesday as it struggles to reduce the oil industry’s biggest debt load. Brazil’s National Petroluem Agency sold only 37 of the 266 onshore and offshore blocks it offered in the worst turnout at a Brazil auction in years. International majors who operate in Brazil, including Statoil ASA, Royal Dutch Shell Plc., and Total SA, didn’t submit any bids. Winning bidders include QGEP Participacoes SA and Parnaiba Gas Natural, both based in Rio de Janeiro. The auction took place amid a slump in crude prices, a national political crisis and with Petrobras, the country’s dominant producer, suffering cash constraints. While small and mid-sized producers prefer to join Petrobras as minority partners to limit risk, the company is balking at new financial commitments, according to Jotavio Gomes, an oil consultant and […]
A worker fills a car with gasoline at a Brazilian Oil Company Petrobras gas station in Rio de Janeiro, Brazil, September 30, 2015. As Brazil prepares for its first sale of oil exploration rights in nearly two years on Wednesday, the auction is shaping up to be a mini-referendum on the willingness of investors to bet on the future of an industry under pressure and a Brazilian economy in turmoil. Not only has the price of oil fallen more than 50 percent since the last auction, slashing sector revenue and potential profit, Brazil’s principal oil company, state-run Petroleo Brasileiro SA, is mired in a giant price-fixing, bribery and political kickback scandal. And with $130 billion in debt and a backlog of existing projects, Petrobras, as the company is known, has not said if it will bid. In all previous auctions Petrobras, alone or as a member of a group, […]
SÃO PAULO—Brazil’s state run oil company Petróleo Brasileiro SA, PBR 5.52 % or Petrobras, cut its investments and expenses outlook through 2016 following a drop in oil prices and sharp depreciation of the Brazilian real. The company said it now expects to invest $25 billion in its operations this year, down from its previous view of $28 billion, and $19 billion in 2016 instead of its previous view of $27 billion. Petrobras said it expects manageable operating expenses of $29 billion this year, down from $30 billion, and $21 billion in 2016, compared with its previous view of $27 billion. The company it expects the cuts “to preserve its fundamental goals of deleveraging the company and creating value for shareholders.” In June, when Petrobras announced its business and management plan for the 2015-2019 period, it was based on a crude oil Brent price average of $60 per barrel this […]
Brazil pledged on Sunday to slash greenhouse gas emissions by 43 percent by 2030 as its contribution to a United Nations climate agreement, but said it will include reductions from past efforts against deforestation to help it reach the target. President Dilma Rousseff presented the country’s pledges during a speech at the U.N. General Assembly in New York, noting the targets are more ambitious than those of most developed countries and that Brazil will not need external support to achieve them. Brazil already curbed emissions by 41 percent between 2005 and 2012, largely through fighting deforestation. Rousseff reaffirmed the country’s commitment to ending that illegal practice in the Amazon , as stated during a joint announcement with U.S. President Barack Obama in June, but fell short of declaring a freeze on deforestation in general as many environmental groups had sought. Emissions from deforestation worldwide account for 15 percent of […]
Transocean Ltd., the world’s largest offshore rig contractor, is being linked for the first time to the corruption probe of Petroleo Brasileiro SA, the state-owned energy giant at the center of Brazil’s biggest corporate scandal. A former executive at Brazil’s state-run oil company has testified to receiving what he says were payments made by someone claiming to be a Transocean agent in exchange for a rig-operation contract from Petrobras. “Transocean has a long-standing commitment to and upholds the highest standards for corporate ethics and compliance,” the company said in an e-mailed response. “Our employees — and everyone conducting business on our behalf — are required to adhere to our high standards for integrity, honesty, financial discipline and legal and regulatory compliance.” As a result of the probe into the alleged pay-to-play scheme, known as Carwash, Petrobras has temporarily blocked more than 20 suppliers from future work with the oil […]
It’s unlikely that oil prices will ever return to $100 a barrel and Petroleo Brasileiro SA needs to work with suppliers to manage the price rout, an executive at the state-run oil producer said Tuesday. “We were all surfing the great wave of $100 a barrel,” Cristina Pinto, the company’s executive manager for exploration and production said at an event in Rio de Janeiro. “It won’t get to $100 again. If it gets to $70, we’ll be happy.” Shares tumble 60% in a year as Brent sinks to less than $50 a barrel The world’s largest producer in ultra-deep waters is working to optimize technology to cut costs and save in everything from buoys to riser pipes used at its offshore platforms, Pinho said. Chief Executive Officer Aldemir Bendine said Monday that the company seeks to reduce costs to withstand a combination of lower oil prices and a weaker […]
Photo Applicants at a government-run job center in São Paulo on Thursday. Brazil’s unemployment rate reached a five-year high, 7.5 percent, in July. Credit Andre Penner/Associated Press BRASÍLIA — The president of Brazil should have been ecstatic. She had just won re-election after an intense campaign in which she fiercely defended her role in making Brazil , for a few fleeting years, a rising star on the global stage. But in the days after her victory last October, President Dilma Rousseff was worried, confronted in private deliberations with her closest advisers by signs that Brazil’s triumphs were at risk of coming undone. “We went too far,” Aloízio Mercadante, Ms. Rousseff’s chief of staff, acknowledged publicly this month, describing the sense of alarm as the dust settled after the election and Ms. Rousseff and her aides grappled with the weaknesses in Brazil’s economy. It was not just the drop in […]
SÃO PAULO—Not long ago, Brazil stood as the leading example of how a developing nation could rise toward global prominence on the force of a China-driven commodity boom. As its economy surged, Brazil stormed the world stage—hosting a World Cup, demanding more say at the United Nations and blocking a U.S. free-trade plan for the Americas. Now Brazil is looking like a symbol of something else: resource-rich nations’ habit of ending their booms with spectacular busts. Brazil’s stock market is down 22% in the past year. Its currency has lost a third of its value against the dollar. And on Friday, Brazil is expected to report that in the second quarter, its economy shrank at a pace of about 1.7%. Economists are voicing fears of prolonged stagnation. China has caused turmoil in many places, but none more so than in this prime supplier of commodities to a country whose […]
A fuel storage tank is seen at the company Petroleo Brasileiro SA, or Petrobras, in Sao Caetano do Sul, near Sao Paulo July 24, 2015. Brazil’s Petrobras may need to pay record penalties of $1.6 billion or more to settle U.S. criminal and civil probes into its role in a corruption scandal, a person recently briefed by the company’s legal advisors told Reuters. State-run Petroleo Brasileiro SA, as the company is formally known, expects to face the largest penalties ever levied by U.S. authorities in a corporate corruption investigation, according to the person, who has direct knowledge of the company’s thinking. The settlement process could take two-to-three years, this person said. To date, the largest settlement of corporate corruption charges with the U.S. Department of Justice and the U.S. Securities and Exchange Commission was a 2008 agreement with Siemens AG, the German industrial giant. It agreed to pay the […]
RIO DE JANEIRO — Tens of thousands of protesters returned to the streets of cities across Brazil on Sunday to express their ire against President Dilma Rousseff , reflecting a low ebb for her as she grapples with a colossal bribery scandal and a declining economy. Still, the protests in some cities seemed to lack some of the urgency of huge demonstrations this year calling for the ouster of Ms. Rousseff, a leftist who won re-election just 10 months ago, suggesting tension may be easing somewhat on the president as congressional and business leaders try to prevent a political crisis from intensifying. The protest in Rio de Janeiro had something of a Carnivalesque feel to it; some demonstrators wore bathing suits as they marched through the Copacabana district as trucks blared samba. But vitriol also marked the event, with some urging the president to kill herself or calling on […]
Photo President Dilma Rousseff speaking in Brasília. Her approval rating has plunged since her re-election to a second term last year. Credit Ueslei Marcelino/Reuters RIO DE JANEIRO — The president is battling calls for her impeachment. The speaker of Brazil ’s lower house is grappling with accusations that he pocketed a $5 million bribe. The former treasurer of the governing Workers Party is in jail. Even former President Luiz Inácio Lula da Silva, Brazil ’s most towering political leader in recent decades, is under the cloud of an investigation into claims of influence peddling. A sweeping anticorruption crusade in Brazil is ensnaring one major political figure after another, throwing the country into upheaval at a time when the national mood is souring and the economy is reeling from a painful downturn. Large segments of the political establishment are maneuvering against President Dilma Rousseff , a rebellion led by some […]
Photo Comperj, a giant refinery and petrochemical complex built by the state oil company, Petrobras, in Itaboraí, Brazil. The unfinished project was originally planned to cost $6.1 billion, but a state audit put the price closer to $50 billion. Credit Andre Vieira for The New York Times Alberto Youssef, a convicted money launderer and former bon vivant, sat in a Brazilian jail cell in March of last year, getting ready to tell his lawyers a story. It was about an elaborate bribery scheme involving Petrobras , the government-controlled oil giant. He opened with a dire prediction. “Guys,” Mr. Youssef said, “if I speak, the republic is going to fall.” To those lawyers, Tracy Reinaldet and Adriano Bretas, who recently recounted the conversation, this sounded a tad melodramatic. But then Mr. Youssef took a piece of paper and started writing the names of participants in what would soon become known […]
Brazilian oil ambitions may be larger than reality, a survey from British energy consultant group Douglas-Westwood finds. File Photo by UPI/Shutterstock/project1photography LONDON, July 6 (UPI) — British energy consultant Douglas-Westwood said the prospects of turning 16 billion barrels of potential Brazilian barrels of oil into reality may be dubious. Douglas-Westwood said it was questioning whether Brazilian energy company Petrobras can turn ambition into reality in deepwater prospects. "Brazil’s huge deepwater potential remains constrained with Petrobras having to revise their production target for 2020, which now forecasts domestic oil output to increase to 2.8 million barrels per day – 40 percent lower than its projection 12 months ago," a forecast published Monday read. Petrobras last week published a management plan through 2019 that reflects the downturn in crude oil prices. The Brazilian company cut overall spending plans by 40 percent, but allocated 84 percent of that to exploration and production, […]
Petroleo Brasileiro SA, the world’s most-indebted oil company, led losses in the Ibovespa as oil slumped on concern supplies are too high. Shares of Petrobras extended a three-day plunge as crude sank 4.2 percent to $56.96 a barrel after data showing U.S. stockpiles rose for the first time in nine weeks and OPEC production increased. The state-run company has said that investments in oil and gas offshore production are economically viable with the commodity above $45. “There are too many uncertainties regarding the profitability of Petrobras’s investments as crude falls,” Eduardo Velho, the chief economist at investment firm INVX Global Partners, said in a phone interview from Sao Paulo. The Ibovespa retreated 0.6 percent to 52,757.54 at the close of trading in Sao Paulo, bringing this week’s decline to 2.3 percent. The gauge had posted the best first half of any year since 2009. Brazilian shares swung between gains […]
Brazil opened the door for a debate on allowing foreign oil companies to operate in a region holding some of the world’s biggest discoveries this century as the state-owned producer struggles to emerge from a graft scandal. Energy Minister Eduardo Braga said for the first time Wednesday that Petroleo Brasileiro SA shouldn’t be forced to operate all fields in the so-called pre-salt region, while adding that now isn’t the time to make changes. “The production-sharing regime needs to be reviewed under the logic that Petrobras should always be the operator when it is in its interest, not an obligation, because we can’t require a company if it doesn’t have the physical and financial capacity,” Braga told lawmakers in Brasilia. “For now, it isn’t the moment or the topic to debate, because I think we are still starting the debate of an area that is extremely voluminous.” The comments come […]
Brazilian President Dilma Rousseff. Photographer: Evaristo SA/AFP via Getty Images (Bloomberg) — From pot-banging on the streets to defeats in Congress, Brazil’s President Dilma Rousseff hasn’t had a good week defending austerity measures she hopes will fix a broken economy. And it’s about to get worse. Brazilians in several cities plan to demonstrate on Sunday against corruption and growing economic hardship, demanding Rousseff’s impeachment. More than a quarter of a million people signed up on social media to participate. On Friday, pro-government unions intend to protest labor and pension cuts. Brazil is one of several Latin American countries where a cocktail of corruption scandals, slowing growth, falling currencies and accelerating inflation is eroding leaders’ popularity as a decade-long commodities boom comes to an end, said Joao Augusto de Castro Neves, Latin America analyst at Eurasia Group. It’s a hard time for Rousseff to be pushing through an austerity package. […]
ENLARGE Rio de Janeiro state Gov. Luiz Fernando Pezão will be investigated for money laundering and public-administration violations. Photo: Felipe Dana/Associated Press RIO DE JANEIRO—A Brazilian high-court judge cleared federal prosecutors Thursday to investigate the current governor and a former governor of Rio de Janeiro state, as a probe into alleged corruption surrounding state oil company Petróleo Brasileiro SA widened. Current Gov. Luiz Fernando Pezão and his predecessor, Sérgio Cabral, will be investigated for money laundering and public-administration violations. Federal prosecutors suspect them of soliciting and receiving 30 million Brazilian reais ($9.5 million) in 2010 from construction firms contracted by Petrobras to build a large refinery in Rio state. Petrobras’s former refining director, Paulo Roberto Costa, detailed the alleged payments last year as part of a cooperation agreement with prosecutors. But because of special rules guiding the prosecution of public officials, Brazil’s vice attorney general had to request authorization […]
The Petrobras logo is seen at a refinery in Cubatao, Brazil, on Tuesday. ENLARGE Photo: Reuters SÃO PAULO—A decision by a major credit-rating firm to downgrade to junk status the debt of Petróleo Brasileiro SA is stoking fears that Brazil’s sovereign rating could be next. Moody’s Investors Service late Tuesday slashed the debt of the company, known as Petrobras, two notches to Ba2, two steps below investment grade, on continued concern about the fallout from a corruption scandal and the state-run oil giant’s ability to pay down about $135 billion in debt. The downgrade was the third by Moody’s since October. Still, the size and timing of Tuesday’s cut surprised some analysts and sent the country’s leaders into a defensive crouch. Brazil’s largest company, Petrobras plays an outsize role in the nation’s economy, which is flirting with recession. Petrobras’s newfound junk status is “an unequivocal blow” to the administration […]
(Bloomberg) — Sete Brasil Participacoes SA, the company founded to lease oil rigs to Petroleo Brasileiro SA, said it’s considering legal measures against a shipyard that pulled out of a $6 billion deal to build drillships. Estaleiro Atlantico Sul, or EAS, owned by Grupo Camargo Correa and Grupo Queiroz Galvao, notified the company that it’s canceling the contract, Rio de Janeiro-based Sete Brasil said today in an e-mailed statement. Sete Brasil didn’t disclose any further details from the cancellation letter. O Estado de S. Paulo newspaper reported today that missed payments from Sete spurred the decision. The cancellation is another setback for Sete Brasil after a former executive and Petrobras manager said in testimony made public Feb. 5 that he took bribes from shipyards, allegedly including EAS, in exchange for contracts. Numerous phone calls and e-mails to EAS for comment weren’t answered. The accusation of corruption increases concern that […]
SÃO PAULO—Some big international investors have been selling shares in Brazil’s state-run oil company Petróleo Brasileiro SA, or Petrobras, as the company faces the biggest crisis of its history amid corruption allegations. Investors including Soros Fund Management LLC, which invests for billionaire investor George Soros and his family; BlackRock Fund Advisors; and Fidelity Management Research Co., cut their stakes in the Brazilian company in the fourth quarter, when the corruption scandal gained force. “Big international investors prefer to stay away from Petrobras because the uncertainty surrounding the company is huge. So they’ve opted to take a conservative path until they see a clearer scenario for the company,” said João Pedro Brugger, a portfolio manager at Leme Investimentos, based in Florianopolis. Mr. Brugger said his company owns shares in Petrobras as part of a portfolio matching Brazil’s Ibovespa stocks index. Soros slashed its stake in Petrobras by 60% to 2 […]
(Bloomberg) — Brazilians are paying more to fill their gas tanks even as oil’s 49 percent rout in the past year drives down prices from New York to Tokyo. Gasoline in Sao Paulo climbed 9.9 percent in the past three months to 3.26 reais a liter, or about $4.50 a gallon, at the start of February, the most recent figures available, according to data compiled by Bloomberg. The price fell 31 percent to $2.06 a gallon in the U.S. and 23 percent to $5.51 in Europe in the period. “We’re swimming against the tide,” Pedro Paulo Silveira, chief economist at brokerage TOV Corretora, said in a telephone interview from Sao Paulo. “The fact is that consumers are in a complicated situation in Brazil.” Brazilian consumers and companies can expect to pay more for all energy this year, from natural gas to electricity. Petroleo Brasileiro SA, the state-run oil producer […]
The board of Petroleos Mexicanos (Pemex) has approved a $4-billion budget reduction for 2015, an 11.5% decrease compared with the previous expenditure program authorized by Mexico’s Congress. Pemex says the cuts, which come amid lower oil prices , are imperative in achieving financial targets set by Congress. Two thirds of the company’s $36.3 billion budget—$24.6 billion—will be allocated toward the company’s investment plans. The remaining one third will go toward operating activities and meeting labor and pension obligations. Pemex says its budget formulation process considered a $79/bbl average price for the Mexican crude oil export basket to estimate annual revenues and to set a corresponding ceiling on expenditures. Deferred spending for downstream activities includes refinery revamps and clean fuels projects involving ultra-low sulfur gasoline and diesel ( OGJ Online, Feb. 18, 2015 ). The board has instructed management to meet with contractors and renegotiate long-term deals that were made […]
SÃO PAULO, Brazil — Endowed with the Amazon and other mighty rivers , an array of huge dams and one-eighth of the world’s fresh water, Brazil is sometimes called the “ Saudi Arabia of water ,” so rich in the coveted resource that some liken it to living above a sea of oil. But in Brazil’s largest and wealthiest city, a more dystopian situation is unfolding: the taps are starting to run dry. As southeast Brazil grapples with its worst drought in nearly a century, a problem worsened by polluted rivers, deforestation and population growth, the largest reservoir system serving São Paulo is near depletion. Many residents are already enduring sporadic water cutoffs, some going days without it. Officials say that drastic rationing may be needed, with water service provided only two days a week. Behind closed doors, the views are grimmer. In a meeting recorded secretly and leaked […]
Brazil faces water disaster; scientists warned it was coming thumbnail Brazil’s largest city is facing a water shortage this year unlike it has seen in decades — a potential disaster scientists have warned about as far back as the 1980s. The metropolitan area of Sao Paulo, the world’s 12th-largest metro population at more than 20 million, is served by two main natural water systems — the Cantareira and Alto Tiete reservoir networks, which barely have any water in them, The Guardian reported this week . The Cantareira is only 5 percent full, and the Tiete is at less than 15 percent of capacity. This is an issue that water conservation advocates and scientists have warned about for decades. The Brazilian government has undertaken moderate efforts over the last 25 years to improve the drought conditions but they have had a limited impact. Experts say the drought could be catastrophic, […]
By Anna Molin Norway’s BW Offhore Ltd. (BWO.OS) Thursday said five people were killed and four are still missing following an explosion on a Petroleo Brasileiro SA vessel off the coast of southeastern Brazil. The offshore production operator and owner said all remaining crew have been accounted for and receiving medical care where needed, with two in critical condition. There were a total of 74 people onboard the platform, operated for state-run oil company Petrobras by BW Offshore. Production has been stopped and the Cidade de São Mateus FPSO unit has been shut down, BW Offshore said. For safety reasons, all employees have been taken off the unit, it added. The accident occurred shortly after midday Wednesday about 75 miles off the coast of Espirito Santo state, north of Rio de Janeiro. "This is a tragic day, and our primary focus now is on the crew and their families. […]
(Bloomberg) — Petroleo Brasileiro SA halted drilling at its largest oil discovery in deep waters, two people with knowledge of the matter said, underscoring the technical challenges facing the company’s new management team. An unplanned procedure to retrieve equipment stopped work for more than a week at a well in Libra, the people said, asking not to be named because it hasn’t been made public. Rio de Janeiro-based Petrobras didn’t immediately respond to a request for comment on the incident and if it had been resolved. Commercial production is expected to start in 2020. While Petrobras expanded output to a record in December at the so-called pre-salt region that holds Brazil’s largest deposits, it has also run into drilling disruptions in the past. In 2010, it abandoned the first well it started at Libra, citing mechanical issues. In 2011, it briefly halted production at the Sapinhoa field in the […]
BUENOS AIRES — The leadership of Petrobras, the Brazilian national oil giant grappling with a sprawling graft scandal, abruptly resigned on Wednesday amid accusations of a bribery scheme involving kickbacks to President Dilma Rousseff ’s governing Workers Party and its allies. The shake-up included the departure of Maria das Graças Foster, the chief executive handpicked in 2012 by Ms. Rousseff, after months of tumult at the state-controlled oil company. Skepticism had grown over Ms. Foster’s capacity to deal with the scandal at a time when low oil prices are also forcing the company to slash spending on costly projects. Ms. Rousseff had recently decided to replace Ms. Foster and other senior executives this month, according to news reports, fueling a surge in Petrobras shares. The newspaper O Globo reported on Wednesday that Ms. Foster insisted on resigning after meeting on Tuesday with the president in Brasília. Reflecting a low […]
Maria das Graças Foster Maria das Graças Foster , the embattled head of Petrobras , is set to step down to help resolve a crippling corruption scandal at the Brazilian state-owned oil company, sources at the presidential palace in Brasília said. The sources said they were unable to provide an exact timetable for her departure but indicated it could be as early as the end of this month. President Dilma Rousseff was reported to have met Ms Graças Foster on Tuesday. A person familiar with the matter said Ms Graças Foster’s position had become “untenable” at Petrobras, which is at the centre of allegations that executives collaborated with politicians, contractors and black market money dealers to cream billions of dollars from the company’s projects in bribes and kickbacks. A spokesperson for the presidential palace refused to comment on Tuesday. A close friend of Ms Rousseff, Ms Graças Foster […]
Sao Paulo state has received only one third of the rainfall expected in the wet season Related Stories Brazil’s Environment Minister Izabella Teixeira has said the country’s three most populous states are experiencing their worst drought since 1930. The states of Sao Paulo, Rio de Janeiro and Minas Gerais must save water, she said after an emergency meeting in the capital, Brasilia. Ms Teixeira described the water crisis as "delicate" and "worrying". Industry and agriculture are expected to be affected, further damaging Brazil’s troubled economy. The drought is also having an impact on energy supplies, with reduced generation from hydroelectric dams. ‘Poor planning’ The BBC’s Julia Carneiro in Rio de Janeiro says Brazil is supposed to be in the middle of its rainy season but there has been scant rainfall in the south-east and the drought shows no sign of abating. The crisis comes at a time of high […]
SÃO PAULO—Monday’s massive blackout is raising concerns that electricity rationing may hit Brazil this year, dealing a potentially serious blow to the nation’s already fragile economy. Energy officials blamed soaring summer demand and a transmission glitch for Monday’s outage , which rolled through the capital Brasília and 11 states, including São Paulo and Rio de Janeiro. But power woes in Brazil, which is suffering from a severe, multiyear drought, won’t be easily solved, according to Mário Veiga, president of PSR Consultoria, an energy consulting group in Rio de Janeiro. He said Brazilian authorities have exacerbated the current crisis by not pressuring consumers to reduce energy consumption sooner. “The problems occurred because the [federal] government did nothing to avoid this situation,” Mr. Veiga said. Mr. Veiga estimated that there is now a 30% chance that Brazil’s southeast, the country’s richest and most populous region, will face energy rationing in coming […]
Source: U.S. Energy Information Administration, Agência Nacional do Petróleo, Gás Natural e Biocombustíveis In 2013, Brazil produced 2.0 million barrels per day (bbl/d) of crude oil and nearly one trillion cubic feet (Tcf) of gross natural gas. Within these figures, the share of production from presalt resources found under thick layers of salt thousands of feet below the ocean’s surface remains small but continues to increase. Crude oil production from the presalt layer was 15% of total production in 2013, a significant increase from 0.4% of total production in 2008 when oil from the presalt was first produced. Similarly, Brazil’s presalt natural gas production represents 14% of total production, up from 0.5% of total production in 2008. Exploration and development of Brazil’s presalt layer began in and around the Tupi field almost a decade ago, with first production in 2008. Further exploration showed hydrocarbon deposits in the presalt layer […]
RIO DE JANEIRO/BRASILIA (Reuters) – When federal investigators first identified signs of corruption at Petrobras in 2009, Dilma Rousseff insisted Brazil’s state-run oil company had nothing to hide. "Petrobras has one of the most accurate accounting standards in the world," said Rousseff, who was then chairwoman of its board and is now Brazil’s president. "If it wasn’t the case, investors would not be seeking out the company as one of the great investment targets." Today, it’s clear her confidence was misplaced. Petrobras now acknowledges it overpaid on contracts for years. Prosecutors say engineering firms paid bribes to win Petrobras contracts, systematically overcharged it to the tune of billions of dollars and funneled a cut of the money to corrupt executives, vendors and political parties, including Rousseff’s ruling Workers’ Party. A Reuters review of a 2009 federal investigation of Petrobras, and interviews with those who conducted it, indicates Rousseff missed […]
Brazil said it’s moving toward limiting fossil-fuel pollution as part of a global deal on climate change, making it the latest major developing nation to indicate it’s ready to set an emission goal. Brazil’s government is considering three options for targets that would restrain the carbon dioxide produced and has made a proposal to the United Nations about how such measures could apply in other countries, said Antonio Marcondes, the country’s ambassador to a UN conference on climate change. “We are in the process of determining our national contribution to the process,” Marcondes said yesterday at a press conference at the talks in Lima. His remarks add momentum to bring developing countries led by China, India and Brazil into a global deal that would limit greenhouse gases in all nations rich and poor alike. Previous agreements like the 1997 Kyoto Protocol required cuts from industrialized nations but not developing […]
SÃO PAULO—A corruption investigation involving Brazilian state-controlled energy firm Petroleo Brasileiro SA is now being viewed as a liability to investors, who just a few months ago snapped up some of the company’s shares in the wake of the scandal. Petrobras confirmed this week it is being investigated by the U.S. Securities and Exchange Commission in relation to Brazilian prosecutors’ allegations that it was at the heart of a vast money-laundering and kickback scheme. The share price has dropped more than 40% since hitting an 18-month high in early September, and the company delayed its third-quarter earnings report because of auditors’ doubts. “No one knows how big the hole is (in the company’s numbers),” said Carlos Gribel, head of fixed income at Andbank Brokerage in Miami. “A lot of people think that worse things could start to come out.” According to prosecutors and suspects arrested in the case, a […]
RIO DE JANEIRO — Paulo Roberto Costa was living an oilman’s dream. He had a house in a luxurious gated community here. He bought a yacht and drove an armored Range Rover. He had more than $25 million stashed in bank accounts in Switzerland and the Cayman Islands. But that dream evaporated recently when the police arrested Mr. Costa and charged him with orchestrating a bribery scheme on an epic scale at Petrobras, Brazil ’s national oil company, and funneling the proceeds to the governing Workers Party and its allies while enriching himself. The case has presented a major challenge to President Dilma Rousseff , who is in a bitter re-election fight against Aécio Neves, a centrist who has been gaining momentum as the vote next Sunday approaches. With the two candidates battling each other for the lead in opinion polls, Mr. Neves is seizing on the oil scandal […]
Chief Executive Officer Maria das Gracas Foster has told Brazil Finance Minister , who chairs the state-run oil producer, that it needs at least a 10 percent increase in fuel prices, said a person with direct knowledge of the talks. Foster said at a recent board meeting that the gasoline and diesel increase is needed to reduce the cost of subsidizing fuel imports, the person said, asking not to be identified because the discussions are private. Foster also said a 10 percent rise wouldn’t be enough to completely eliminate subsidies or reduce the debt-to-equity ratio, or leverage, to an internal target of 35 percent by year-end, the person said. A weaker Brazilian real compared with the has increased the cost of importing gasoline and diesel and put a strain on the Rio de Janeiro-based company’s , the person said. It’s the first time this year Foster has specified the […]
Petroleo Brasileiro SA (PETR4) fell the most in almost six years as President Dilma Rousseff gained support in a voter poll, sinking wagers that a new government will reduce intervention in the state-owned oil company . Shares of Petrobras slumped 11 percent to 18.60 reais at the close of trading in Sao Paulo , the biggest decline since November 2008. That loss contributed the most to the 4.5 percent drop in the benchmark Ibovespa today. Rio de Janeiro-based Petrobras had gained 95 percent from its lowest level this year in March through Sept. 2 as support for opposition candidate Marina Silva increased. “There was a moment in the past weeks when a victory by the opposition was almost a certain thing, but this expectation seems now more and more distant,” Marcelo Varejao, an analyst at the brokerage firm Socopa, said in a phone interview from Sao Paulo. “The way […]
Petroleo Brasileiro SA (PBR) requested access to a former executive’s allegations of a kickback scheme involving the state-run oil producer in a scandal that threatens to influence the outcome of presidential elections. Petrobras, as the Rio de Janeiro-based company is known, asked the judge investigating the so-called Car Wash money-laundering case for details of testimony given by former refining head Paulo Roberto Costa, it said yesterday in a statement. The oil producer also wrote to companies cited by Brazilian press as allegedly involved in kickbacks, Petrobras said, without identifying them. Veja magazine reported over the weekend that a group of more than 30 politicians, including members and allies of President Dilma Rousseff’s Workers’ Party, allegedly received bribes linked to Petrobras contracts. The Sao Paulo-based magazine said the list of names was given by Costa during testimony to the federal public prosecutor. Costa, who is in jail as the police […]
Oil services company Wood Group Kenny said Tuesday it secured more than $2 million in contracts for work off the coast of Brazil from Petrobras. Program director Hugues Corrignan said the company has a strong relationship with Brazilian energy company Petrobras, a relationship strengthened by new contracts. "We are particularly pleased to be selected to support Petrobras in these challenging projects and have the opportunity to positively contribute to the introduction of innovative technologies in the Brazilian environment," he said in a statement. Wood Group Kenny said it would help Petrobras and its partners develop heated pipeline technology for oil deposits trapped beneath a thick layer of submarine salt, dubbed pre-salt. The oil services company said the technology would be the first ever in a pre-salt environment. The technology targets the Lapa field, located about 170 miles off the coast of Rio de Janeiro. Petrobras in December said the […]
