This week, the Wall Street Journal revealed that the U.S. government plans to invest US$2 billion in Petrobras, Brazil’s state-run oil company. It is the largest company headquartered in the Southern Hemisphere and the largest company in Latin America in terms of revenue. Its assets, which include oil assets in Brazil and 18 other countries, amounts to $133.5 billion.
The investment, which is in fact a loan, is to help Petrobras explore the Tupi basin off the coast of Rio de Janeiro, which could potentially make Brazil one of the world’s biggest oil powers. The investment will go towards offshore drilling activities to take place over the next several years.
According to the article, a preliminary commitment of $2 billion is on the table, though that amount may increase. However, some experts are scratching their heads about the idea of a loan from the ailing U.S. Treasury to cash-rich Petrobras.
Also this week, the New York Times reported that the Brazilian government is seeking more control over Petrobras in an effort to prevent foreign influence and to ensure national control over the Tupi oil field. However, the reform plan, which is being promoted by President Lula, faces strong opposition in Congress.
Comments:
Bruce:
This makes absolutely no sense!!! Are the folks at the head of our US government crazy????? Why not drill in our OWN deep sea wells?? Aren’t we supposed to try and become less dependent on foreign oil??? The only reason I can imagine we would loan Petrobas any money would be so we can get some of their oil for ouselves. Wouldn’t that make us MORE dependent on FOREIGN oil????
Drill now in US waters and the ANWAR!!!!
Stop making such silly decisions!!!
Laura:
I agree with Bruce. Who would profit from this “investment”/”loan” by the American Government. And why don’t we invest in an American oil venture to help put some of our unemployed to work? Why doesn’t the Brazilian government invest in its own private industry? Their balance sheet is far better off that ours!
WE need the oil, we need the employment, we need the enterprise.
Who made this decision?
Paul Diemer:
All of Petrobras production goes to China. Why should the U.S. even be involved?
Mex:
Does not make ANY sense…unless you are george Sorros….this company is one of his top 2 investments and he has hundreds of millions invested. Oh yeah, he also has a close relationship with relationship to the Obama administration…now it all makes sense….and I thought it was supposed to be the rebublicans in bed with Big oil?? Even more amazing is this compnay specializes in deep drilling…like 3 miles down…yes our recent spill was on a rig at one mile down…but yet ObaObama is stopping all deep water drilling here??? Thus Petrobras stock will certainly skyrocket. Where is the media in all this?????