Foreign companies aren't quitting Brazil but instead are looking for partners to help finance the large investments needed to develop mammoth offshore oil fields, the head of Brazil's government-run oil company, Petroleo Brasileiro (PBR), or Petrobras, said in an interview with the O Estado de Sao Paulo newspaper.
Foreign companies aren't quitting
Brazil
but
instead are looking for partners to help finance the large investments needed
to develop mammoth offshore oil fields, the head of
Brazil
's
government-run oil company, Petroleo Brasileiro (PBR), or Petrobras, said in an
interview with the O Estado de Sao Paulo newspaper.
"If you look at what's happening with BG, what happened with Repsol, and
what's happening with Galp, apparently they're not leaving
Brazil
, nor
are they selling their stakes in our blocks," the report quoted Jose
Sergio Gabrielli as saying.
A number of recent press reports have suggested that foreign companies were
looking to sell Brazilian assets outright, but Gabrielli said they were in fact
just looking for ways to help finance the investments.
The
U.K.
's BG
Group PLC (BG.LN, BRGYY) is planning to sell stakes in some of its Brazilian
assets as a way of strengthening its presence in
Brazil
.
"It is a strategy for reinforcing [their
Brazil
investments], much more than escaping," Gabrielli said.
Late last year, Spain's Repsol YPF (REP.MC) sold a 40% stake in its Brazilian
operations to China Petrochemical Corp. (SNP), or Sinopec, for $3.76 billion,
part of a series of asset sales made to finance the significant investments
necessary to exploit the vast oil reserves it has found in Brazil.
Portugal
's
Galp Energia (GALP.LB), meanwhile, is looking to raise some EUR2 billion from
the sale of between 15% and 20% of its Brazilian assets, and is using the
Repsol/Sinopec deal as a point of reference. The company has said it expects to
complete the deal by the third quarter, but isn't in any hurry.
The Petrobras chief executive played down Petrobras' ambitions with regards to
those Galp assets.
"We have not made any movement in the direction of Galp," he said.
Gabrielli said he isn't concerned about Chinese or Russian companies increasing
their investments in the Brazilian oil industry.
Sinopec "wanted to be close to the production of oil. That is very good
for
Brazil
,"
Gabrielli said.
Global oil prices aren't likely to fall over the medium term, as demand is
likely to remain strong and the cost of production are also likely to increase,
he said.
Meanwhile, Petrobras is in no hurry to sell the $13.6 billion of assets which
it has earmarked for sale, the executive said. The company hasn't decided
whether it will sell them individually or as a single package, he added.
"We have two and a half years to do this and we're not in a hurry. We have
$26 billion in cash," Gabrielli said.
Petrobras will increase its imports of gasoline this year to the equivalent of
nine days' consumption, more than three times the amount imported last year,
Gabrielli said.
He acknowledged that, by not raising prices in line with the market, Petrobras
is losing money on the gasoline imports. But he pointed out that Petrobras made
more money in 2009-2010 when it kept prices high even though market levels
fell.
Petrobras' stated objective is to iron out volatility in gasoline consumption
prices, aiming to keep local prices in line with the market over the long term.
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