Petrobras Denies Shelving Debt Sales in Scandal Wake

Posted by Greg Trauthwein
Monday, April 07, 2014

Petroleo Brasileiro SA on Monday denied that it had shelved plans to sell debt in local and international markets later this year after a series of scandals involving the Brazilian state-controlled oil producer.

A source with direct knowledge of the plans told Reuters on Monday that the company was worried that investor perception about the extent of the scandals could hamper demand for its debt or raise borrowing costs. The source requested anonymity because of the sensitivity of the issue involving Petrobras, as the company is commonly known.

A spokeswoman, who could not be named because of company policy, denied the Reuters' report, without confirming whether the company mulled any potential deal. While Petrobras could change its mind and resume the plans at some point, the fact that the Rio de Janeiro-based company has already raised the $25 billion it needed to finance part of its operations this year helped in the decision, the source added.

Petrobras was considering the sale of as much as 3 billion reais ($1.35 billion) of so-called infrastructure notes this quarter, as well as offering euro- and British pound-denominated global bonds before year-end, a source said earlier this year.

The company has come under fire in Congress and in the media over concerns it might have overpaid for an oil refinery in Texas. In addition, a government agency is investigating allegations that company officials took bribes in exchange for steering contracts to SBM Offshore NV, a Dutch oil-production ship leasing company.

A former official has also been arrested in an alleged money-laundering case. Opposition lawmakers want to investigate the company because of its relationship with the government of President Dilma Rousseff, who might run for re-election in October.

Concerns about political meddling, mounting indebtedness and failed efforts to boost output have weighed on confidence about Petrobras, which for years was considered one of the world's most solid oil industry stories. Last month, the company raised $8.5 billion from a bond offering in six different portions, although it paid considerably more to tap investors.

In January, Petrobras sold the equivalent of about $5 billion in euro- and British pound-denominated bonds, in an effort to diversify its fundraising sources.

The cost of insuring Petrobras' 10-year dollar debt from default through credit default swaps, rose by about 2 basis points on Monday to 311.08 points. The yield on the bond due in Dec. 2016 slipped 2 basis points to 6.31 percent on Monday, near the highest level in at least two years.

Preferred shares, the company's most-traded class of stock, rose 6.6 percent to 16.46 reais in Sao Paulo trading Monday afternoon. That is the highest level for the stock since December.

($1 =2.22 Brazilian reais)

(By Guillermo Parra-Bernal; Reporting by Guillermo Parra Bernal; Additional reporting by Jeb Blount; Editing by Leslie Adler, Lisa Shumaker and Eric Walsh)

Maritime Reporter March 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Obangame Express 2015 Concludes in the Gulf of Guinea

Maritime forces from Gulf of Guinea nations, Europe, South America, and the United States and several regional and international organizations concluded the multinational maritime exercise,

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

Offshore

China Unveils Action Plan on Maritime Silk Road

China has unveiled the principles, framework, and cooperation priorities and mechanisms in its Maritime Silk Road initiative in a bid to enhance regional connectivity

JV Wins $2bln Freeport LNG Contract in US

A joint venture (JV) between CB&I, Chiyoda International and Zachry Industrial has won a contract worth over $2bn from FLNG Liquefaction 3 for a liquefied natural

Feds Delay LNG’s Port Ambrose Application

The US Coast Guard and the US Maritime Administration (MARAD) have temporarily suspended their review of the proposed Port Ambrose deep-water LNG import terminal.

Finance

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

India May Add Japanese Soryu-Class Submarines to its Fleet

India is reportedly considering a project to incorporate six Japanese Soryu-class diesel-electric submarines into its fleet, says The Japan Times.   The Defense

Energy

USA Urged Not to Delay Arctic Drilling

The U.S. should immediately begin a push to exploit its enormous trove of oil in the Arctic waters off of Alaska, or risk a renewed reliance on imported oil in the future, reports AP.

Feds Delay LNG’s Port Ambrose Application

The US Coast Guard and the US Maritime Administration (MARAD) have temporarily suspended their review of the proposed Port Ambrose deep-water LNG import terminal.

Austal Graduates 48 4-Yr Apprentices

Austal USA combined two classes to graduate a total of 48 members of Austal’s cutting-edge four-year apprenticeship program yesterday at a formal ceremony held at the Arthur R.

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Offshore Oil Pipelines Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1425 sec (7 req/sec)