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Non-Tech : The Brazil Board -- Ignore unavailable to you. Want to Upgrade?

To: architect* who wrote (700)	1/17/2012 2:43:32 PM
From: elmatador	Read Replies (1) \| Respond to of 2518

Why You Should Buy Brazil's Petrobras I often get asked why I haven't been more positive about Brazil (EWZ). The answer is twofold; an upcoming election was about to bring a regime change in the high growth country, and there was a huge supply overhang from the upcoming secondary equity offering from Petrobras (PBR), the largest in history. That turned out to be a good call, with the main market dropping 6% so far in 2010, when most emerging markets were going to the moon. PBR has been a great short, dropping 31% from its peak. Now Petrobras issue is done, and it is time to review the space. The company raised a staggering $70 billion, with the Chinese government coming in a major participant. The issue was priced so low that success was assured, despite its gargantuan size. Hedge funds and institutional investors whittled down their PBR weightings, hoping to cover their underweight on the deal. As the issue was generously oversubscribed, they are now scrambling to cover these shorts. Petrobras will use the funds raised to develop their enormous Tupi offshore field, which is estimated to have 50 billion barrels of recoverable reserves. That will double the company's production to 3.9 million barrels a day by 2014, which is equivalent to 20% of American consumption. The company is well on its way to becoming the next oil major. I think oil is a great place for the long term, and now is not a bad time to get in, as it has been one of the few underperforming commodities this year. I usually say buy the dips, but the dip in PBR has been going on for the past six months, so just buy now. By. Mad Hedge Fund Trader

To: architect* who wrote (700)	10/19/2013 6:56:34 AM
From: elmatador	Respond to of 2518

Brazil Sweetens Libra Oil Field Sale Terms to Lure Bids By Peter Millard & Maria Luiza Rabello - Oct 11, 2013 8:24 PM GMT+0300 Brazil is easing the terms of an auction to develop Libra, the country’s largest oil find, after fewer-than-expected companies signed up for the sale. The group that wins the contract at an Oct. 21 auction will be required to give 50 percent of output to the government until costs and investments are covered, according to new terms published in the Official Gazette today. Under original rules, the government’s share would rise to 70 percent after two years of production. The group offering the government the largest share after costs are covered wins the contract upon paying a 15 billion-real ($6.9 billion) signing fee. Brazil, which expects Libra will generate billions of reais to fund public education and health, has failed to auction a bullet-train project this year and to renew some utility licenses after contract terms led investors to shy away. China National Petroleum Corp. and Royal Dutch Shell Plc (RDSA) are among 11 oil producers registered to participate in the Libra auction, which Brazil’s oil regulator expected to attract more than 40 companies. The move to sweeten the rules comes after Augusto Nardes, head of the court overseeing government spending, said the higher returns would improve the “legal security” of the contract. “The change is good for the industry,” Adriano Pires, head of the Brazilian Center for Infrastructure in Rio de Janeiro, said by phone. “It’s a good incentive.” Libra, which holds as much as 12 billion barrels of oil, is located in the ultra-deep region known as pre-salt underneath the Atlantic seabed, which holds the largest group of crude discoveries this century. Brazil’s state-run Petroleo Brasileiro SA (PETR3), which expects pre-salt deposits to double its output by 2020, will hold at least 30 percent of each pre-salt field auctioned by the government and control operations. Small TurnoutTotal SA, Ecopetrol SA and China National Offshore Oil Corp. are also among companies registered to bid. The “surprisingly small” turnout was caused by a limited amount of geological data, a lack of experience with the government’s production-sharing model and the potential size of investments, Bank of America Corp. analyst Frank McGann said in a Sept. 19 note to clients. The number of participants was about a quarter of the more than 40 companies expected by the regulator, Magda Chambriard, the head of Brazil’s oil agency ANP, told reporters in Rio on Sept. 19. “This is an attempt to comply with the demands and real scenarios of the companies and the global market,” Leonardo Theon de Moraes, a corporate lawyer at Sao Paulo-based Mussi, Sandri & Pimenta Advogados, said of the change of terms in an e-mailed reply to questions. To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net