Posted on 09/16/2014 6:02:03 AM PDT by thackney
Investors are losing interest in Brazil's oil industry as the country's energy policies raise costs, reduce efficiency and increase risk, Brazil's oil industry association, the IBP, said on Monday.
Without changes Brazil will likely lose out to places such as Mexico, Iran, Iraq and Algeria where policies are becoming more open to private sector investment.
"I went to the three largest oil conventions in the world this year and you hardly heard Brazil's name mentioned," Milton Costa Filho, Executive Secretary of the IBP told reporters at an industry event in Rio de Janeiro. "Brazil is falling off the world oil map."
"That wasn't the case a few years ago," Costa Filho said. "But investors have other options now" including rising shale oil output in the United States and Arctic oil prospects in Russia and Norway.
The IBP announced its agenda of priorities for 2014-2015, asking the government to review policies that have strengthened state-control over the oil industry, policies it believes are hurting a sector that accounts for 12 percent of the gross domestic product of Brazil, the world's seventh largest economy.
Since those policies were adopted in 2008 in the wake of offshore oil strikes, Brazilian oil and natural gas output has stagnated, despite more than $200 billion of investment.
(Excerpt) Read more at rigzone.com ...
ping related to your recent Brazil Oil question
Didn’t Obama give them $5 Billion for oil exploration?
Pray America wakes
With Socialism, the stupid gibmedat people always get what they THINK they want!?
In Venezuela, u have to use leaves on the ground to wipe your south side.
Brazilian oil and natural gas output has stagnated, despite more than $200 billion of investment.
♫ "There's no tellin' where the money went" ♫
Well, well... Probably Clown Prince nobama should have given the American taxpayer $5,000,000,000 for lubricant in order to make his so-called administration more tolerable and less painful. These commie asses are reaming us every second one way or another.
Dispelling the Brazil Oil Loan Myth as Obama Heads to Rio
http://www.forbes.com/sites/kenrapoza/2011/03/17/dispelling-the-petrobras-loan-myth-as-obama-heads-to-rio/
The Export Import Bank is a government run bank. It made a preliminary commitment to offer Petrobras $2 billion in April 2009....
On February 4, 2010, the Bank entered into a medium-term credit guarantee facility with Petrobras for $308 million. That means if Petrobras wants, it can go to a bank in this case it is JP Morgan and take out a loan for $308 million to buy goods and services from US companies. The Export Import Bank then would guarantee that loan from default, which in turn makes JP Morgan happy because it will not lose money and will make interest on the loan; make Petrobras happy because the loan guarantee means low interest rates on the loan; and it makes the Export Import Bank happy because they can collect fees (undisclosed) and provide a boost to the companies in the US in which Petrobras will do business.
Although the Bank has agreed to guarantee the loan to be made by JP Morgan, the transaction is not operative. Thats a legal term that means no legal documents have been signed by JP Morgan or Petrobras saying that the loan is active. The Bank approved it, but Petrobras has not acted on it for more than one year later....
Brazil is expensive. Anything you import (read: parts for equipment) is taxed at least 50%. And they have tightened their requirements for “national content,” meaning they want things manufactured in the country.
My company experienced all of this first hand. I can see where investors, given other options, would take them.
In 2010, I was working on preliminary for 4 new refineries. The national content requirements were strong then, but I remember it as 15% import tax, and that was on anything, including intellectual property like process and design drawings. We had to work-share with Brazil engineering/design firms or could not get the work.
And didn’t Soros put a bundle of money on Brazil’s oil businesses?
The 50% may not all be “tax” per se, but it comes close to approximating the bottom line you actually pay. When you import, there are always custom duties and other associated fees. And people you pay to expedite working through the customs/import process.
Okay, so not all applicable to something like hiring engineers from US.
No, I am talking about things like replacing seals on a compressor or the like. When you need to have something brought in from the US to fix something and you need to do it quickly.
Sort of sounds as though the government is choking the golden goose.
The Brazilians are having an election early in October. The people we stayed with about a month ago said there are 32 political parties in Brazil and all of them have either the word Socialist or Communist in their name.
Absolutely. They are not the first and sadly won't be the last. I've used the same phrase for Alaska, but they are getting better.
This should be a warning to Alaskans and the so-called, red neck socialists who scream “It’s our oil!” Yep, it’s yours until no one wants it.
That is the reason the ACES taxes was repealed. But many still want that overbearing profit tax.
It is their oil, but it is not the only oil available. Alaska (and Brazil) should be really booming right now, like Texas and North Dakota.
But before they could do that, the economy and the price of collapsed so they had to call off the stock offering, because no one would buy the stock at the low price of oil.
They didn't want to delay the project so they decided to borrow some money to tide them over until the price of recovered and they could proceed with the stock offering. The figured they would need 30 billion for 2009-2013.
They raised the money pretty quickly, including the last 10 billion that came from China Development Bank. When China got in, Obama said the US needed to get in so he arranged loan guarantees from Ex-Im for 10 billion. Brazil had already raised the 30 billion and didn't need Obama's money, but agreed to accept 2 billion.
As the Forbes article pointed out, they never utilized any of the Ex-Im loan guarantees. And they never really had to borrow much from the other sources either because the price of oil recovered very quickly. It was back up to 100/bbl by the spring of 2011.
So Petrobras had their stock offering in Sept 2011 and raised 70 billion.
But the GOP was quite successful in using Soros as a bogeyman scapegoat because their base is not very well informed.
Petrobras,China Sign $10 Billion Deal(2009)
China knew that Soros owned stock in Petrobras and they wanted to help Soros
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