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Brazil To Profit From Obama Drilling Ban

From CNN’s Money.Com:

The one oil stock that may be worth buying

By Paul R. La Monica, editor at large June 14, 2010

NEW YORK (CNNMoney.com) — Brazil is one of the favorites to win the World Cup. It may also be an investor favorite in the hard hit oil sector.

While shares of BP continue to get crushed as the spill in the Gulf of Mexico gets worse by the day, Brazil’s Petrobras has stabilized in the past month.

The oil giant, which is controlled by the Brazilian government, is even considering selling a big chunk of stock in order to raise money to finance more drilling off the Brazilian coast.

Would that be offshore drilling? Would that be ‘deep water’ drilling, in which Petrobras leads the world?

According to a report in the Financial Times Monday, Petrobras (PBR) is seeking to raise $25 billion through a stock offering later this summer.

Apparently, the $811 million investment from Mr. Soros and the $10 billion (with a B) Mr. Obama has ‘lent’ Brazil is not enough to pay for Brazil’s ambitious offshore drilling plans.

The fact that Petrobras is apparently ready to sell more stock at a time when the energy sector is in turmoil is clearly a sign of confidence.

It sounds to us that, just like Mr. Obama, they believe in taking full advantage of every crisis.

According to figures from Thomson Reuters, if Petrobras succeeds in selling $25 billion in stock, it would be the second largest equity offering ever, trailing only a $36.8 billion sale of stock by Japanese telecom NTT in 1987.

And a sale of Petrobras stock in the coming months might still make sense and generate healthy demand. While most oil companies with deepwater drilling operations were hit hard immediately after the tragic explosion at the Deepwater Horizon rig on April 20, investors have appeared to be more discriminating in the past few weeks.

"The initial reaction was this is bad for all deepwater oil companies," said David Pursell, managing director with Tudor, Pickering, Holt & Co., a Houston-based investment bank focusing on the energy industry. "Now, if you have Gulf of Mexico exposure, your stock is still hurting. But if you don’t investors realize that your company could benefit."

As long as companies are prohibited from doing more exploratory drilling in the Gulf, that’s going to lead big oil firms to look elsewhere around the globe, Pursell said.

Who is going to stop non-American companies from drilling in the Gulf?

Brazil is a natural option given its ample resources, and Petrobras is pretty much the only game in town for an oil company looking for a domestic partner there.

"Petrobras could be a winner because capital could be directed from the Gulf toward Brazil," Pursell said. "If the six-month moratorium in the Gulf becomes 12 months, Brazil could ultimately utilize mote drilling assets. And Petrobras is the preferred partner."

Not only is capital being directed away from the Gulf – at least any American operations – but the rigs and other equipment are going to migrate elsewhere — for years. So, by all means, invest in Brazil.

Mr. Obama and his master Mr. Soros thank you.

This article was posted by Steve on Tuesday, June 15th, 2010. Comments are currently closed.

9 Responses to “Brazil To Profit From Obama Drilling Ban”

  1. Mr. Obama is invested in Brazil.


    “You read that headline correctly. Unfortunately, the Obama Administration is financing oil exploration off Brazil.

    The U.S. is going to lend billions of dollars to Brazil’s state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil’s planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.

    The U.S. Export-Import Bank tells us it has issued a “preliminary commitment” letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.

    But look on the bright side. If President Obama has embraced offshore drilling in Brazil, why not in the old U.S.A.? The land of the sorta free and the home of the heavily indebted has enormous offshore oil deposits, and last year ahead of the November elections, with gasoline at $4 a gallon, Congress let a ban on offshore drilling expire.

    The Bush Administration’s five-year plan (2007-2012) to open the outer continental shelf to oil exploration included new lease sales in the Gulf of Mexico. But in 2007 environmentalists went to court to block drilling in Alaska and in April a federal court ruled in their favor. In May, Interior Secretary Ken Salazar said his department was unsure whether that ruling applied only to Alaska or all offshore drilling. So it asked an appeals court for clarification. Late last month the court said the earlier decision applied only to Alaska, opening the way for the sale of leases in the Gulf. Mr. Salazar now says the sales will go forward on August 19.

    This is progress, however slow. But it still doesn’t allow the U.S. to explore in Alaska or along the East and West Coasts, which could be our equivalent of the Tupi oil fields, which are set to make Brazil a leading oil exporter. Americans are right to wonder why Mr. Obama is underwriting in Brazil what he won’t allow at home.”

    Just a wild guess, I bet Soros is heavily invested in Petrobras.

  2. Trialdog says:

    Finally we have transparency! Obama loans money to Brazil for oil exploration. Brazil must report back what it is finding to Obama. Obama passes the information to Soros. (No, cannot prove that – but it is obvious Soros doesn’t act without information) Soros invests in Brazilian oil. Deep Horizon happens. Podesta, according to a WSJ link on Drudge and paid Soros agent, encourages Obama to impose a moritorium on drilling that goes against the advice of the committee he ordered to study the issue – at least that’s what the scientists say but the WH calls them liars. Obama does what Podesta wants and issues the moritorium. Now the rigs are being sent to Brazil and Soros profits handsomely. Obama sees opportunity for a two-fer. Instead of working to protect the gulf states against the pollution, his team begins to employ fundraising and legislative strategies using the disaster as a prop. The crisis grows, he does what he does best – blame someone, everyone, else and pushes for a centralized “global solution.” So tonight, for the children and the environment, indeed for earth itself, he will give a speech. He will lie about what he has done to manage the crisis and promise his new legislation will fix it, forever and ever. It is all pretty transparent. He’s still a low level charlatan street hustler. Always was, always will be. He just looks good doing it because he’s got one hell of a teleprompter.

  3. And it gets better..

    From Friday’s Market watch: http://www.marketwatch.com/story/soros-reports-735-increase-petrobras-stake

    “Billionaire investor George Soros on Tuesday reported that during the fourth quarter he increased his already considerable stakes in Brazilian state-controlled oil company Petroleo Brasileiro S.A….

    ….Soros, through his Soros Fund Management LLC, reported holding 36.8 million American depositary receipts of the Brazilian oil company known as Petrobras as of Dec. 31 – a holding valued at about $900 million at the time. Soros held 21.2 million ADRs at Sept. 30, according to his disclosure filed with the Securities and Exchange Commission. ”

    My belief in coincidence is bolstered by my belief in the great pumpkin.

  4. Enthalpy says:

    There will never be a time when Soros isn’t on the profit side of all of this. He’s directing it.

  5. mr_bill says:

    I wonder if the liberals feel that PetroBras is making too much money and deserves a “windfall profits tax.” Will Hillary Clinton be going to Brazil to insist PetroBras pay its ‘fair share’ of taxes? Whats that you say, she just got back from there? I don’t recall Hillary railing against evil PetroBras like she does to our domestic companies…that’s strange.

  6. Right of the People says:

    I used to laugh at conspiracy theories but not anymore. This is just too damn coincidental.

    This virus needs to be removed. If we can get rid of this plague upon humanity soon we just might be able to get things back to a semi-normal state in the next 5 or 6 years. Might.

  7. proreason says:

    People, jeez.

    Sure, Soros tried and nearly succeeded at destoying the Bank of England, and the UK in the early 90’s.
    Sure, Soros tried and nearly succeeded at destroying Indonesia in the last 90’s.
    Sure, Soros has been convicted of insider trading by Hungary in the fall of 2008 during the time he was ruinig the world economy to get Barack Obama elected.
    Sure, Soros has bragged about all of these accomplishments on numerous occasions.
    Sure, Soros founded Media Matters, the house organ of the Obamunists.
    Sure, Soros has declared many times that he seeks to destroy Capitalism.
    Sure, Soros is a frequent visitor to the White House
    Sure, Soros gave milllions, perhaps billions to Obamy’s campaigns.
    Sure, Soros bought a million of Obamy’s self-indulgent ektobiography to make the Moron rich.
    Sure, Obamy, with no authority, invested 10 billion of your tax dollars in Petrobas even though he won’t invest a dime in US drilling.
    Sure, Obamy dragged his heels for 2 months to allow the BP oil splill to destroy the oil industry in the US.

    But really, what evidence do you possibly have that Mr. Soros is involved in any way in the BP spill, other than his multi-million dollar investment in Petrobas, and the one in a million fact that he now stands to make billions from it now that Obamy has declared we are abandoning oil (no matter how many people die because of it) and returning to the horse and buggy age?

    • heykev says:

      Excellent points Pro

      I would consider Mr. Soros a bigger threat to Western Civilization (at least at this moment) than Osama bin Laden.

      Mr. Soros has actively sought the downfall of England and the USA. Today, he’s predicting a European recession. If he didn’t own the DNC outright, he could be brought up on Treason charges.

  8. canary says:

    I picture Obama leaving our country after he destroys it. Traveling the world, as he appears to be setting up cribs in other countries.

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