Oil, Gas Companies Seek More Financing from BNDES

National development bank BNDES has faced increased demand for loans from oil and gas companies in light of the market's move to attract private investments since the late 90s, the head of BNDES oil, gas and renewable energy department Claudia Prates told BNamericas.

"The bank is now financing more companies in the sectors aside from Petrobras, which has had most of the financing up to now," said Prates.

Bank disbursements for oil and gas projects - not including platforms, which are financed through another department - rose to 2.4bn reais (US$1.1mn) to December 12 this year from 2.2bn reais in the whole of 2005.

The department's disbursement for the whole of 2006 should increase mainly because of disbursement for projects to build platform support vessels.

Brazil's oil sector opened in 1995 and since the first round of exploration licenses took place in 1999, some 50 oil companies have started operating in E&P.

The companies have started to seek financing from BNDES now their exploration work is starting to yield results and enter development. Investments commitments by the oil and gas industry are due to top US$100bn for the next five years, according to industry information.

BNDES has a 60bn-real lending budget for 2006 and is Brazil's main source of financing for long-term projects because it offers below-market rates and loan maturities of some 12 years.


Total disbursement in the first 11 months of 2006 was 43bn reais, the bank said in a statement.

Disbursement through December 12 this year for gas transport projects totaled 811mn reais plus 700mn reais for refineries, 345mn reais for gas distribution companies and 532mn reais for support shipping projects.

Financing for support vessels rose 125% from 236mn reais in 2005.

Petrobras still had the lion's share of financing thanks largely to the 1,400km Gasene gas pipeline project and the 385km Coari-Manaus pipeline.

But the bank has also disbursed money for other projects such as the Manati gas production project, in which Brazilian engineering company Queiroz Galvao is the operator.

Further, the bank has disbursed loans to private gas distribution companies such as CEG, Comgas and Gas Natural SPS.

BNDES also disbursed money to state-controlled companies such as Compagas and SCGAS, Prates said, adding lending to state-run companies is restricted due to fiscal legislation.

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