Petrobras' Capital Increase Should Be Largest in History

The Director of Finance and Investor with of Petrobras, Almir Guilherme Barbassa, detailed, in a public hearing in the Brazilian Senate this Tuesday, October 20, the capitalization process of Petrobras. The officer stated that the company's capital increase should be the largest in the world's history. Nearly 20 senators attended the hearing.

"We are preparing to perform a capital increase that will probably be the largest in the world," affirmed the director, reminding that the financial crisis increased the aversion to risks. "Fortunately, Brazil has been considered as a good place to invest. The company's capital increase is going to bring more resources to our cash hoard and boost the liquidity of Petrobras bonds, since we will have more shares in the market. This issuance is going to bring Brazil to the center of the stage, attracting capital to the country," pondered Barbassa. He remembered that currently the Brazilian Government owns 32% of the company's capital stock, and BNDES owns 7.7%. "Thirty percent of the company's shares are traded in the New York Stock Exchange, in Bovespa, 8% of the shares are owned by foreigners. Brazilians have some 20% of the shares," he said.

Additionally, the director highlighted that Petrobras is considered most transparent company of the industry in the world, and will continue to pursue its governance benchmark in the capital increase operation. With prices rising, the sharing regimen is the most appropriate, the director said.

Barbassa highlighted the importance of the change to a shared regimen, mainly because of the market's projections for the next decades. The director reminded that the world's oil production tends to decline concurrently with the growth in demand, even when one considers the increase of the use of alternative energy sources. With this, stated Barbassa, the price of oil tends to increase. "In 2030, there a potential decline of 75 million barrels per day. The price, therefore, tends to increase and, with the sharing regimen, the State will benefit from the price increase. With concessions, profit increases stayed with concessionaires," he compared.

The director also reminded that the current output of the country and the self-sufficiency in oil achieved by Petrobras are the results of previous discoveries to 1997, when the monopoly regimen was in force in the country. He reminded that that the largest oil field producer at this moment is Marlim, discovered in 1985, and followed by Marlim South, of 1987. Then, he noted other fields discovered in those times, such as Barracuda, Jubarte, and Roncador, which today reinforce the Brazilian output. "What is being produced now is the result of the Petrobras monopoly period. Brazil is self-sufficient today because of its achievements in that time. The concession did not contribute for the present production. The results of the concessions will emerge by 2015, 2020, assessed the director, reminding that Petrobras is the company that acquires most new areas from ANP (National Oil, Natural Gas, and Biofuels Agency).

Barbassa also highlighted the advantages for Brazil of having Petrobras as the pre-salt operator. "Petrobras will be the company that most knows the pre-salt. It is worth remembering that there is there also is the pre-salt on the other side of the Atlantic, and this opens a golden opportunity for Brazil for drilling and production, and for exporting goods and services. It is an unparalleled opportunity," he stressed.

Systems accompany interests of countries throughout the world

Answering a question to Senator Tião Viana, from Acre State, and to the economist and former Treasury Department Head during the Fernando Henrique Cardoso administration, Maílson of the Nóbrega, who also participated of the hearing, Barbassa explained that there are no exactly similar regimens in the world. "Each country creates the regimen according to its interests. Norway, for example, deployed a blend of sharing and concession regimens." He returned to the Norwegian example to stress the importance of the State leading the development of the oil fields. "Oil is a strategic asset. And, in this sense, the sharing regimen meets national interests and allows greater control. In Norway, when oil was discovered in the eighties and the nineties, a queue of fields was created to be developed according to the interests of the State and with the local industry," he stated. "Regarding the companies, they work with the both regimens."

The director pointed out that Petrobras preparing for the pre-salt by hiring personnel: "Since 2002, we already hired more than 27 thousand new employees and we are investing heavily in training," he said.

Option by deep waters brings more results

Senator Tião Vianna emphasized the environmental responsibility of the Company in Urucu, in the Amazon, and questioned the reason of Petrobras prioritizing deep sea drilling over dry land prospecting. Barbassa answered: "The Amazon was one of the first locations that we began to survey, back in the sixties. We continue to study the area. But the success was far from that which we obtained in the sea," explained the director, remembering that the allocation of the company's investments is mainly directed by the rate of success and by the return on investment rate.