Brazil seek ways to assist Petrobras for Libra oil exploration
Financing Petroleo Brasileiro SA is one of the the plans the current Brazilian government had laid out for the October 21 auction of Libra. Libra is the largest ever oil discovery in Brazil.
This was the headline in the Saturday report of Estado de S. Paulo daily newspaper. Furthermore, the government is also studying other options to provide assistance for the cash-strapped Petrobras in the large investments necessary for the exploration and extraction activities in Libra in consonance with a 2010 oil law passed in the country. The newspaper cited an unnamed source for the information obtained and reported.
The options available include the increase in Brazilian fuel prices, the reduction of dividends in its shareholdings in Petrobras and modification of the provisions in the 2010 oil for shares swap.
In a related development, Petrobras CEO Maria das Gracias Foster said earlier in the week that Petrobras has the capacity to explore and produce all the oil from the Libra find. The problem though is the lack of financial capability for the investments required to develop the area.
The oil law required Petrobras to raise BRL4.5 billion regardless of the companies that had signed up for the auction in the offshore area. Furthermore, Petrobras must have a 30% shareholdings in the winning group and be the group's operator for the exploration and development of the Libra oil find.