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Petrobras CEO: no order from Brazil to help Batista' s EBX Group

RIO DE JANEIRO -- Energy giant Petrobras, denied on Wednesday that the country' s government has ordered the company to help billionaire businessman Eike Batista' s troubled EBX Group out of its financial dilemma.

Discussions with Mr. Batista' s EBX Group, which include interests in ports, shipbuilding, oil production and mining, to make some of the entrepreneur' s projects feasible "do not exist," Petrobras Chief Executive Maria das Gracas Foster told reporters Wednesday in Sao Paulo.

"What we have had since September with [EBX Group] are discussions about utilizing some assets," Ms. Foster said. For example, Petrobras has talked about using a liquefied natural-gas terminal that could potentially be developed at the Acu port currently under construction by Mr. Batista' s LLX Logistica, Ms. Foster said.

"We are discussing other services-type opportunities, but everything depends on cost," Ms. Foster added. The executive also noted that Petrobras has a shipbuilding contract with OSX Brasil.

However, a person close to the government said this week that negotiations could lead Petrobras to sign up for a berth at LLX' s Acu port. Despite Ms. Foster' s comments, LLX shares remained up more than 8% in Wednesday trading after posting a 7% gain the previous session.

Talks of a potential partnership with Petrobras came as investors are questioning the ability of Mr. Batista' s companies to meet targets and raise funds to finance capital-intensive infrastructure projects. On Tuesday, Moody' s Investor Service downgraded OGX Petroleo e Gas Participacoes, a Batista oil company, because of low production flows and concerns over tightening liquidity. In the last 12 months, OGX' s shares have lost 88% of their value.

04/10/2013

 

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