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