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EDITORIAL
Last month will be remembered by the heated discussions stemming from the BP accident, most notably those regarding operational safety rules and requirements in force at Gulf of Mexico sites as opposed to those practiced elsewhere, in particular in Brazil by Petrobras.
In view of this intense debate, we have included in our editorial a small text addressing the question as to why we believe that accident would not have occurred in Petorbras operation.
As always, we appreciate your readership and hope you enjoy our newsletter as much as we enjoy preparing it.
Heller Redo Barroso
Founding Partner
Heller Redo Barroso & Associates |
Igor Tavares
General Manager for Latin America
The Energy Exchange |
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| Brazilian Shipping Industry on Fire! |
At the risk of being repetitive, it is very satisfying for us to re-emphasize the upward trends in the Brazilian shipping industry.
From an overoptimistic expectation to a mushrooming realty, the demand for vessels is on fire.
During the last month several oil companies confirmed their intention to have new oil rigs built.
Repsol will build four new oil rigs.
Petrobras confirmed its constantly-delayed auction for the construction of 28 deep-water rigs.
In the Petrobras biddings, Queiroz Galvao Oleo e Gas and Petroserv each offered to build two drillships at the Keppel Fels-run Brasfels yard near Angra dos Reis. Sao Paulo-based Etesco bid to build two drillships at a yard that is yet to be constructed by Brazilian newcomer OSX, as well as two semi-submersible units to be assembled at Brasfels.
Norway’s Odfjell bid to build two drillships at another new shipyard. Among the overseas contractors, Saipem was the surprise bidder, offering to build four drillships at a yard in the Estaleiro Ilha (EISA) shipyard.
Brazilian shipping industry is, indeed, fired up!
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| Refining Sector Skyrocketing! |
Petrobras released its investment plan for 2010-2014, which forecasts investment growth of 5% in the areas of refining, transportation, and marketing as compared to the 2009-2013 investment plan.
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| Petrobras’s Capitalization and Daring Investment Program |
For Petrobras to be able to carry out such a huge investment program, in the ballpark of US$224 billion, the company will rely on the capitalization plan it submitted for approval to Congress and has already been sanctioned by President Lula.
In this plan, oil reserves in the pre-salt area will be used by the Government to pay for subscribed shares as part of an increase in Petrobras’s capital stock.
This oil-for-shares swap with the Brazilian Government, will increase its holdings in Petrobras, already at 36% of the company’s voting stock.
A major problem, of course, is the valuation of these oil reserves. One assessment was already carried out by Petrobras and will be re-checked and certified by Gaffney & Clyne, a firm engaged by the Brazilian Petroleum Agency – (ANP).This additional certification is expected to be completed by the end of August.
Some Petrobras executives, including international director Jorge Zelada in a recent interview, have indicated that the company may also sell some of company’s international assets.
At the same time, Petrobras’s suppliers will count on international banks to help them with the necessary funds they will require to support Petrobras’s ambitious plans. Norwegian banks, following the strategy of their North-American and Chinese counterparts, are now supporting the country’s suppliers in carrying out ventures in Brazilian territory.
The petroleum industry itself is also developing the means to provide financing for Petrobras by indirectly “lending money” via sellers’ credits.
Moreover, Brazilian industry players are receiving capital inflow from private equity funds and other funds such as those of Caixa Econômica (including an oil & gas specialized fund managed by Modal).
In the second half of 2010, BTG Pactual is expected to launch an oil & gas-specialized private equity fund as well, following the enormous success of their electric energy fund, FIP Brasil Energia.
These funds, as well as new, more-flexible financing mechanisms from BNDES, are not targeted for oil companies but rather for the Brazilian petroleum offshore industry for the supply chain and service providers.
Other local and international banks are also creating special funds focused on that segment of the petroleum industry.
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| ARTICLES |
| Operational Safety – Brazilian Government Intervention
Are Oil Leak Accidents Less Likely to Happen in Brazil?
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Following the BP incident, much has been discussed in Brazil about how disasters of such magnitude could be prevented here largely through ANP’s (National Agency of Petroleum, Natural Gas and Biofuels)strong proactive posture regarding operational safety in drilling operations.
Under Brazil’s regulatory framework, prior to the commencement of oil field development activities, concessionaires must submit a development plan for ANP’s approval.
As stated in ANP Ordinance number 90 of 2000, this development plan encompasses several aspects of an oil field development and is elaborated with all pertinent technical details.
As an example of such depth, the Development Plan Executive Summary by itself contains:
a) Geographic location of the development area, with identification of the state and municipality and average water depth whenever the area is located offshore
b) Main features of production reservoirs
c) Total and proven reserves of oil and natural gas at the field, and production flow peak, specifying the year of its occurrence
d) Drainage grid and production method
e) Number and main features of producing wells, injectors and others, as well as other relevant features of the well completion
f) Production collection systems
g) Oil and natural gas production units, with emphasis on their basic features
h) Processes involved in separation and treatment of oil and natural gas, as well as treatment and location for waste disposal
i) Production offloading systems
j) Investments required for field development, indicating the amounts allocated to fields, production units, production, collection, and offloading systems
k) Expected duration of the undertaking
l) Expected demobilization of the field.
Furthermore, the Ordinance sets forth that the Development Plan must contain information in sufficient detail to allow ANP to understand and follow-up development of the field, as well as data to indicate several production ratios that demonstrate that production operations will take place according to the oil industry’s best practices.
Regarding operational safety control, the most relevant element in the regulation is the mandatory set of principles that requires ANP to approve a project. According to the Ordinance, ANP will only approve Development plans that include:
(i) assurances/warranties of preservation of oil resources (effective recovery, decline control, etc);
(ii) assurances/warranties of operational security and safety and prevention of operational accidents; and
(iii) assurances/warranties of environmental preservation and minimal impact on the environment.
On the basis of item (ii) (“assurances/warranties of operational security and safety and prevention of operational accidents”), we understand that ANP may reject Development plans that lack subsea projects in compliance with general operational safety standards.
Therefore, by establishing that operational safety is a key criterion for approval of a development plan, regulations allow ANP to turn down a development plan that does not include equipment designed for maximum safety and security. This is reinforced if one considers BP's example in the Gulf of Mexico and its defective automatic shut-down BOP system.
In addition to preventive control through the development plan approval procedure, there are other rules related to operational safety.
These include ANP Ordinance number 43 of 2007, which introduced the so-called “TECHNICAL REGULATION FOR MANAGEMENT OF OPERATIONAL SAFETY AND SECURITY FOR OIL AND NATURAL GAS DRILLING AND PRODUCTION OFFSHORE FACILITIES”.
This technical regulation sets forth requirements and guidelines for the implementation and execution of operational safety management with a view to increasing operational security in drilling and production offshore units.
However, it is important to note that the technical regulation does not contain provisions regarding use of specific equipment/safety standards, but mainly introduces management systems to be adopted by oil companies to prevent or deal with possible operational accidents.
Even though Ordinance 43 rules do not provide specific requirements for equipment, the management control elements increase Government awareness over possible problems in field operations.
For example, if multiple failures occur for of safety systems that are intended to give advance warning of a blowout, the oil company should immediately cut off the flow of oil.
Another way of monitoring the safety of oil & gas operations is through agencies that review field development, such as IBAMA review during the grant of drilling licenses (authorization for well drilling for identification of beds and extensions thereof, upon submission and approval of an Environmental Control Report).
Regardless of this spectrum of mechanisms that the Brazilian Government has to ensure operational safety, many specialists have stated that ANP should enact a new ordinance imposing even stricter safety requirements for the oil companies exploring in Brazil. This could provide specific requirements regarding subsea equipments for preventing oil leaks and blow-outs (BOPS, automatic anti-flood systems, etc).
However legislation imposing such specific safety and security requirements (e.g. obligation to use specific equipment), even though it might be a more compelling requirement than control using development plan approval, would not be in line with the dynamics of the oil and gas industry, which is always moved by technological developments.
We believe that, on the principle of “operational security and prevention of operational accidents” embodied in the ANP ordinance that regulates the Development Plan approval procedure, gives Agency a strong hand in rejecting a specific development plan whose subsea projects do not meet specific operational safety standards. Thus, in an indirect manner, ANP has substantial influence in getting oil companies to use equipment designed for maximum safety and security.
Obviously effective and reasonable control requires that ANP develops sufficient in-house technical expertise to give the agency the means for it to deliver and enforce opinions on purely technical matters. Otherwise ANP’s sole discretion in dismissing a development plan would be downright illegal.
Finally, we must also highlight Petrobras’s record in safety management. The Tupi extended well test interruption, for replacing the defective Xmas tree, is a good example of Petrobras’s safety standards. At the time of the well intervention, Petrobras declared that it had decided to perform this preventive action in line with its HSE politics.
Furthermore, since the new Brazilian oil bill indicates that Petrobras will become the sole operator of new pre-salt areas, it must be extremely diligent in its operation at safety measures.
Any accident would probably jeopardize its institutional image as well as the entire regulatory framework approval procedure of the Brazilian Congress.
We hope this review will help you understand why many specialists have declared that an accident such as BP’s is less likely to happen in Brazil. This is a terrible moment for the entire oil & gas industry, and every discussion related to ways of improving safety management should be promoted.
In relation to technical solutions, according to the information we obtained through petroleum engineers at Petrobras and other companies, in addition to the BOP (blow out preventer), Petrobras also uses an automatic lock system for each drilling column, as well as choke manifolds. In the USA, BP only uses the BOP at each well, which are usually activated by ROVs instead of remote controlled BOP.
Furthermore, in Petrobras’s operations, if both the automatic BOP and the locking system fail, the rig operator still has the option to remotely activate the BOP valve.
Actually, there are three different kinds of BOPs -- pipe rams, blind rams, and shear rams - each of which use various mechanisms to remotely seal off a leaking well. The pipe ram fits tightly around the pipe to cut off flow from the outside. The blind ram caps the pipe by closing completely over the top of it. And the shear ram cuts through a leaking pipe and seals the open hole.
According to Transocean, which owned the Deepwater Horizon rig and leased it to BP the rig in the Gulf was outfitted with all three kinds of BOPs.. Yet none of them were able to prevent the tragedy now fouling the Gulf with up to 60,000 barrels of oil a day.
Deepwater Horizon's BOP is a 450-ton set of hydraulic rams that straddles the wellhead, just above the seabed. When the well blew out last month, sending oil and natural gas up the well, signals to the rig operators or loss of communication with the surface should have automatically released pneumatic pressure stored in the BOP's tanks.
This would have driven it to mechanically crimp or shear off the well pipe and close off the well.
BP has so far been using remotely operated vehicles in what has been a vain effort to activate the Deepwater Horizon BOP's control system valves. Some experts say that the Deepwater Horizon BOP's lack of a signaling device (called an acoustic trigger, which enables remote control of some rigs' BOPs) probably had no impact in this case. Bommer says an acoustic trigger would simply have sent the same signal that the remotely operated vehicles are now delivering, albeit several days earlier.
Testimony from oil executives suggests that multiple failures of safety systems should have given advance warning of a blowout, or should have immediately cut off the flow of oil.
Such failures included a dead battery in the blowout preventer, a possible breach in the well casing, and failure of the shear ram (a device of last resort that was supposed to cut through and seal the drill pipe in the event of a blowout).
The technical information in this article is based on what we could gather from discussion with engineers. Although we do not have formal technical credentials, we noticed some inconsistency in the opinions of such engineers. However, if we have misunderstood some of these technical explanations, we offer our apologies for any inaccuracy in this final part of the article.
Authors: Heller Redo Barroso and Marcos Macedo
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| UPSTREAM NEWS |
| Red Cards for Yards in Huge Bidding for Brazil Rigs |
Petrobras Gets Five Bids for Deep-Water Rigs
Petrobras has received bids from five companies offering to supply chartered deep-water rigs under the second part of a massive domestic rig-building program.
The first part of the bidding, offering sale contracts, attracted bids from nine shipyard groups.
Queiroz Galvao Oleo e Gas and Petroserv each offered to build two drillships at the Keppel Fels-run Brasfels yard, near Angra dos Reis.
Sao Paulo-based Etesco bid to build two drillships at a yard that is yet to be constructed by Brazilian newcomer OSX, as well as two semi-submersible units to be assembled at Brasfels. Norway’s Odfjell bid to build two drillships at another new shipyard.
Among the overseas contractors, Saipem was the surprise bidder, offering to build four drillships at a yard in the Estaleiro Ilha (EISA) shipyard.
Companies invited to bid included Pride International, Atwood Oceanics, Transocean, Sevan Marine, Ensco, and Odebrecht. Another four companies invited bid failed to show up. These were Noble Drilling, Seadrill, Schahin and Brasdrill (Diamond Offshore).
Commercial proposals for both the EPC sale contracts and charter rigs will be opened once the appeals process has been concluded.
Technical disqualification of three of those vendors is currently undergoing appeal review, but Petrobras has decided to go ahead with the second part of the bidding anyway.
The three shipyards struggling to overturn disqualification rulings are EISA, Engevix and STX Offshore.
Petrobras is hoping to contract for up to 28 rigs with ultra-deep-water capabilities. The EPC contracts are grouped into seven-unit packages for the drillships, with an additional procedure allowing up to two non-shipshape rigs to be contracted. The chartered rig contracts are limited to up to four rigs per bidder.
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| Petrobras Signs on Rio Yard |
Petrobras has finalized a 20-year lease on the former Ishibras yard in the state of Rio de Janeiro for about 4 million reais (US$2.2 million) a month
The facility (to be renamed the Inhauma Shipyard) is located on the Guanabara Bay and has a draft of 7 meters. The yard will serve as a support base for ferries owned by Petrobras and could also be used for floating production, storage, and offloading unit conversions.
The oil company has been granted tax breaks by the state government in exchange for taking charge of turning around the yard, which had fallen into disrepair.
The yard has to be equipped with new cranes and undergo refurbishment before starting operations. Petrobras will invest some of its own capital into the initial renovation, but majority of the investment is expected to come from contractors that will sub-let the yard.
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| SBM Lines Up Brazil Floater |
SBM Offshore and partner QGOG have landed a letter of intent to supply a floating production, storage and offloading unit for Petrobras's developments in Brazil’s prolific pre-salt region.
The LoI covered the 20-year charter and operation of a floater at the Tupi Nordeste development, in Block BM-S-11 in the Santos basin.
The floater will include topside facilities to process 150,000 barrels per day of fluids, handle associated gas treatment for 5 million cubic meters per day and have a water injection capacity of 150,000 bpd.
The unit will be owned and operated by a consortium comprised ofSBM, QGOG, Nippon Yusen Kabushiki Kaisha and Itochu. The division of shares of the consortium is yet to be finalized depending on financing alternatives. However, SBM’s share will not be less than 44.4% no exceed 50.5%.
Under the current project schedule, the FPSO will be delivered in 34 months.
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| Lupatech Signs Two Contracts with Petrobras |
Lupatech has signed two service contracts for the exploration of Petrobras’s wells.They are estimated to total US$779 million, for the 5-year period starting as of the beginning of operations. The total amount involved is in R$1.5 billion ballpark.
The contracts will be divided into two stages. The first one, estimated to be US$403 million, is the operation in 2,500meters of water depth in pre-salt area. It will continue until 800 days after the contract’s signing.
The second stage, estimated to be US$376 million, includes the providing of services for up to 1,00 meters depth, which will be performed until 700 days.
The contracts are related to two biddings won by Lupatech Equipamentos e Serviços para Petróleo in December. Since the beginning of this year, the group has signed an agreement with Petrobras in the amount of R$155 million related to the supply of valves that will be delivered during the next two years, as well as R$150 million in pipelines for oil and gas exploration for a period of 3 years.
Lupatech is also negotiating for over three more service contracts with Petrobras, as well as five operations related to the supply of anchorage cables to maritime platforms.
The operations plan for the charter of two semi submersible platforms from the Norwegian Company Eide, which will operate the vessels. Lupatech will perform interventions to increase wells productivity, including the installation and removal of equipments making use of remotely-operated vehicles.
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| Petrobras Adds to Its Pre-Salt Finds |
Brazil’s state-owned Petrobras has found oil in pre-salt reservoirs in its offshore Albacora Leste field in the Campos basin.
The discovery was the result of drilling the 6-ABL-57D-RJS well below the sandstone layer. The 6-ABL-57D-RJS well is situated 130 kilometers off the coast of Rio de Janeiro in a water depth of 1956 meters.
Preliminary estimates suggested the accumulation was light, good-quality oil, but further drilling will be required to assess the volume, extent, and productivity of the reservoirs.
Petrobras holds a 90% interest in the Albacora Leste field, which is being developed in partnership with Spain’s Repsol, hold on of the remaining 10% interest.
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| Petrobras Cheers Tupi Find |
Brazil’s state player Petrobras said light oil was found in a seventh well drilled in the giant Tupi discovery off Brazil, reinforcing the estimated resource potential of 5 to 8 billion barrels of oil and natural gas in the pre-salt field.
The Tupi Alto well, otherwise named 3-RJS-674, was drilled to 2111 meters below the water line, located nearly 275 kilometers off Rio de Janeiro, and 12 kilometers north-east of discovery well 1-RJS-628. The well was drilled in a higher structural position than the other wells in Tupi, and the discovery of light oil was prove via a cable test.
The Tupi field lies in Block BM-S-11. Petrobras operates the offshore block with a 65% stake. Partners include BG Group (25%) and Galp Energia (10%).
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| LLX signs Financing Agreements with BNDES to Develop the Sudeste Port |
LLX Sudeste Operações Portuárias Ltda. signed long-term financing agreements with BNDES for to the development of Sudeste Port.
The financing, approximate, R$1,2 billion, is divided into two stages: the first one in the amount of R$407,7 million related to the Investment Sustainability Program (BNDES-ISP); and the second one in the amount of R$805,1 million related to project finance.
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| Brazil Bounty Beckons Frances’s Total |
France's Total has boosted its holdings in Brazil, taking a 20% slice of the Shell-operated BM-S-54 concession in the Santos basin.
Shell holds the remaining 80% of the concession. The deal is subject to regulatory approval.
The block is close to the very prolific block BM-S-11, where the Tupi, Iara, and Iracema oilfields were discovered. Exploration drilling is planned for later this year subject to approval by the ANP and The Brazilian Institute of Environment & Renewable Natural Resources (IBAMA).
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| Petrobras's Oil and Gas Production in Brazil and Abroad Up 2.1% |
Taking only Brazilian fields into account, Petrobras’s latest monthly oil and gas production was 2.35 million boed. This is an increase of 1.8% over the same month in 2009 and remains stable compared to the volume produced in April this year (2,36 million boed).
Specifically, oil production in domestic fields was 2.02 million barrels per day, an increase of 1.5% over a year earlier( when 1,9million were produced) and 0.6% less than the previous month's mark (2,03 million barrels/day).
This reflects stability in on-going production levels.
Natural gas production in domestic fields topped-out at 52.8 million cubic meters per day in May, practically the same as the prior month and a year earlier. Natural gas production abroad was 16.214 million cubic meters, 4.8% less than in May 2009 but 5.8% more than last April. Greater demand for Bolivian gas contributed to this positive result.
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| Transpetro Launches Ship Built in Rio |
From the Mauá Shipyard, Transpetro launched the first ship built in Rio as part of the Program for Modernization and Expansion of the Fleet (Promef). It is a vessel for transportation of light petroleum derivatives with a capacity of 48,300 deadweight tons and a length of 183 feet long.
The State of Rio de Janeiro, home to the largest and most traditional marine industry of the country, already has 16 ships ordered by Promef, in the amount of R$2.2 billion in investments.
The program will create at least 50.000 jobs in the state - 10,000 direct and 40.000 indirect.
With the commissioning of 49 vessels of Promef - one of the main projects of the Country’s PAC (Growth Acceleration Program) - the yards have been modernized. Today, five years after the launch of Promef, Brazil already holds the fourth largest worldwide portfolio of orders for tankers. With the construction of 49 new ships, Transpetro will generate about 200.000 jobs, across the country, both direct and indirect. 46 vessels have already been bid.
The last three ships are in the final stage of bidding.
According to the National Union of Construction Industry and Shipbuilding and Repair Offshore (Sinaval), Rio de Janeiro accounts for more than 50% of the total productive capacity of the country. Before the creation of Promef, the Brazilian shipbuilding industry employed only about 2,000 workers around the country. Today, that number now exceeds 46,000.
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| Prospects for Future Demand |
| Under the new Petrobras Business Plan (2010-2014), production of oil and gas will nearly double, jumping from 2.7 million barrels oil equivalent per day in 2010 to 5.3 million barrels per day in 2020. Naturally, this will greatly increase the demand for shipping.
The transportation of produced oil or gas and the supply of production platforms require innovative solutions for logistics. Demands for shipyards are still being quantified by Petrobras and Transpetro.
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| MIDSTREAM NEWS |
| Another Letter of Intent with Petrobras |
| Manguinhos Refinery has signed with Petrobras a letter of intent for the purpose of performing studies to verify various business opportunities. These include: the development of partnerships in refining sector; improvement of Manguinhos Refinery for the production of gasoline, diesel and other products; logistic and transport services; and biodiesel production. The letter will shall be valid for one year with the possibility of renewal. Back |
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| OTHERS ISSUES |
| Petrobras in Line for GALP Stake |
Petrobras and Portugal's largest bank CGD are preparing to close a deal to buy a 33.3% stake in Portuguese Galp Energia held by Italy's Eni
Petrobras is likely to buy a 25% stake in the Portuguese company, while the state-run CGD would buy the remaining 8%. The deal would cement an existing partnership between Petrobras and Galp, whose two refineries and terminals in Portugal offer an entry point into Europe for the Brazilian company.
The joint solution would avoid the need for Petrobras to launch a bid for control of Galp since CGD, which owns a 1% stake in Galp, is part of an existing shareholder agreement that expires this year. Galp's main shareholders – Eni -, Portugal's Amorim Energia with the same size stake, and the Portuguese state with an overall 8% stake including CGD's 1% - have a pact that allows no sales of shares before the end of this year.
Galp is Petrobras's partner in several oil finds off the Brazilian coast, including the super-giant Tupi field.
Sonangol - which is already a partner in Amorim Enegria - wants to buy directly into Galp. It wants to boost its stake in Galp as part of its strategy to expand its business abroad. Back |
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| Brazil Unveils $224 Billion Plan |
Petrobras will boost its investments over the next five years by 29%, stepping up its campaign to tap the country's prolific pre-salt play and deep-water margin.
Petrobras's unveiling of its $224 billion investment program for 2010 - 2014 sets the stage for a shareholders' meeting to approve the long-awaited oil-for-shares swap with the Government.
By this vehicle, Petrobras could raise $25 billion in cash and issue as much as $60 billion worth of shares.
The investment plan, which increases investments from the $174.4 billion earmarked in the 2009 - 2013 plan it replaces, boosts outlays for downstream activities and reduces those for upstream activities.
Refining, transport, and marketing will receive 30%, compared to 25% in the 2009-2013 plan, while exploration and production will account for 53% of the total, compared to 59%t in the previous plan.
A preliminary valuation for the Brazilian oil holdings by an independent auditor will be key for investors in gauging the size of the total share offering. Back
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| Petrobras Postpones Share Issue |
Petrobras will postpone its public offering of shares until a certifying company assisting the Federal Government in its negotiation regarding the value of the Transfer of Rights is hired.
The procedure to hire the certifying company is in its final stage, and the decision should be announced by ANP in August.
Due this announcement schedule, Petrobras will postpone until September its proposed public offering of shares, which would enable it to fund its 2010-14 business plan and to pay for the Transfer of Rights.
Petrobras received shareholders approval for the deal, valued at up to $84 billion, in which the government will receive company shares in return for giving it access to as much as 5 billion barrels of offshore oil, Minority shareholders will pay cash for stock.
Petrobras was counting on the capitalization plan to finance this year's portion of the $224 billion five-year investment plan, which is primarily aimed at advancing Brazil's deep-water offshore operations. Back
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| ANP Signs Agreement for Certifying Pre-Salt Reservoirs |
| ANP has signed an agreement with Gaffney, Cline Associates Inc. to audit existing pre-salt reservoirs. The audit report will be used to determine which reservoirs will be granted to Petrobras under ther oil-for-shares capitalization plan. The audit will be concluded at the end of August. Back |
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| Petrobras Has No “Plan B” for Cash |
Petrobras has no planned alternative to an oil-for-shares capitalization plan that is scheduled for September.
Petrobras’s only plan to boost capital is through a transfer of oil rights in exchange for company shares in a oil bill the Government outlined last year, which also includes an offering to minority shareholders. The company has no alternative plan for capitalization.
Petrobras delayed its offering by two months after ANP announced it would not have an estimate of the value of the oil to be used in the swap until the end of August.
In a separate matter, the company will pay 1 million reais (US$555,000) to Brazil's securities regulator following charges the company did not provide adequate market notice of an oil discovery in 2007. The company originally offered to pay 400,000 reais (US$222,000) to settle the issue, which the CVM (Brazil’s SEC) rejected. Back
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| Lula Approves Law Allowing Petrobras’s Capitalization |
| President Luiz Inácio Lula da Silva approved the law that allows the issuance of new Petrobras shares in order to finance part of its investment plan of US$224 billion.
Petrobras’s capitalization, scheduled for September would permit Petrobras to issue new shares in an amount equivalent to the value of 5 billion barrels of offshore oil.
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| Norway Approves US$ 1 Billion Credit to Petrobras |
| Petrobras has signed a letter of intent with GIEK - Garanti-instituttet for eksportkreditt aimed at identifying business opportunities between Norwegian suppliers and Petrobras.
The financing amount is up to US$1 billion and will be divided as following: US$ 300 million regarding existing agreements and R$ 700 million for future ones.
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| Brazilian Federal Revenue Publishes New List of Countries Considered Tax Havens |
Brazilian Federal Revenue published Normative statement nº 1.037/2010 which establishes a new list of countries with favorable taxation and fiscal systems, known as “Tax Havens.” Among them is Switzerland and French Polynesia.
Brazilian Federal Revenue considers as Tax Haven countries that benefit from income non-taxation or a tax rate lower than 20%, including those countries that do not allow the access to information related to company’s corporate structure or income beneficiary identification (foreigner).
Notwithstanding, due to a request, the Federal Revenue Department can withdraw Switzerland and the Netherlands from the list of tax havens.
The application for revision is still under analysis. Back
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| Cost of BP Spill Hits $100m per Day |
In the past three days, BP has spent $300 million on its Gulf of Mexico oil spill response effort, hitting the $100 million per day spending rate for the first time and bringing its total bill to $2.65 billion so far.
The figures released by BP include the cost of trying to cap the well, clean up the environmental damage caused by the leaking crude, and pay compensation to those affected by the spill.
BP has informed that it remains on track to complete its relief well, which aims to kill the leaking well at the point it meets the reservoir, in the three month timeframe initially envisaged, despite progress slowing on the well in recent days.
The well was being drilled at the rate of 1000 feet per day, but the pace dropped to less than 100 feet a day, as the delicate task of closing in on the leaking well is carried out.
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| Sources: Reuters, Energia Hoje, Brazil Energy, TB Petroleum, OGlobo, Upstreamonline, Rigzone, Bloomberg, Petrobras Agency, |
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