Brazil to fund Petrobras' stake in Libra field auction
BY JEFF FICK
RIO DE JANEIRO -- Brazil' s government plans to finance state oil company Petroleo Brasileiro S/A, or Petrobras, in the upcoming auction of one of the world' s largest offshore oil discoveries, the Estadao de Sao Paulo newspaper reported over the weekend.
Citing a source close to President Dilma Rousseff, the newspaper reported Petrobras could receive loans from the country' s treasury or national development bank BNDES to pay the cash-strapped company' s part of the $7 billion signing bonus. The government is also considering allowing an increase to domestic fuel prices and lower dividend payments to the treasury, among other options, to strengthen Petrobras' s finances, the newspaper said.
Brazil will auction off the Libra offshore oil field on Oct. 21, when 11 companies will compete for the right to develop the field. Under new production-sharing agreements, Petrobras must hold at least a 30% stake in the field. Libra is estimated to hold between eight billion and 12 billion barrels of recoverable crude.
Dow Jones Newswires