Saturday, February 20th 2016 - 10:32 UTC

Shell suggests Petrobras should cede some drilling rights to foreign firms

Brazil’s government-owned oil giant Petrobras should cede some of its drilling rights to foreign firms, Royal Dutch Shell Oil CEO Ben van Beurden was quoted saying in Estado de Sao Paulo newspaper.

 ”I think it makes sense to call on other companies who have the technology, who have the money,” said Shell CEO van Beurden

Last year, Petrobras CEO Bendini promised to sell upwards of $14 billion in assets in order to tackle its short and mid-term debt obligations.

 The Shell Oil man is arguing for greater private investment in Brazil’s precious off-shore oil fields in the Atlantic Ocean, rather than current rules that require 50% ownership by Petrobras. In theory, such a move would entice private oil firms to explore for more oil and keep it for themselves, rather than having to share half of it with Petrobras.

That wouldn’t eliminate government royalties, but it would give foreign firms like Shell the incentive to explore and develop deep water oil fields on their own.

The government is considering these changes in an effort to take some debt pressure off Petrobras, the most heavily indebted company in Latin America.

“It’s up to congress to decide. But I think it makes sense to call on other companies who have the technology, who have the money,” van Beurden said in what amounts to a lobbying effort on behalf of big oil companies interested in Brazil’s undersea oil wealth. “I don’t see how this is not beneficial for Brazil,” he added.

Brazil’s government may not have much of a choice. If it wants to make some fast money for the beleaguered Petrobras, it might find itself selling what the market wants most: pre-salt level oil fields.

Last year, Petrobras promised to sell upwards of $14 billion in assets in order to tackle its short and mid-term debt obligations.

New CEO Aldemir Bendini was brought on board to tackle these divestitures. But very little has actually been sold. Surely nowhere near half. And Bendini’s goal was to hit that target this year.

15 comments Feed

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1 L0B0MAU (#) Feb 20th, 2016 - 01:08 pm Report abuse
Drilling rights only? Instead; should sell PB, Privatize it!
2 Tik Tok (#) Feb 20th, 2016 - 02:31 pm Report abuse
Makes perfect sense because who would do a partnership in any kind with Petrobras when that company is going to be bankrupt.
3 Brasileiro (#) Feb 20th, 2016 - 03:03 pm Report abuse
Never! The oil belongs Brasil. Not to Petrobrás or Shell.
4 Briton (#) Feb 20th, 2016 - 08:51 pm Report abuse
drilling rights to foreign firms,
its argentine oil,
CFK said as much,

Argentina owns everything.
5 L0B0MAU (#) Feb 20th, 2016 - 10:39 pm Report abuse
REF: “The oil belongs Brazil”:
But in spite of that, the Brazilians are paying absurdly high price - for the oil as well as for maintaining PB functioning.

PB [like many other govt. owned organizations & Public Companies] is a Total 100% Liability - a White Elephant - operated purposefully, for fulfilling the personal interests of the corrupt politicians.

SCANDALS [Known AND Unknown (so far)] PLUS CRISIS [political, social & economic] = DISASTER [expected but unfortunate & unnecessary]
6 Skip (#) Feb 20th, 2016 - 10:45 pm Report abuse
Resources do belong to the people and the country as a whole.

Doesn't mean the government should be the only one to develop them.

Royalties and taxes should be used to harness the benefits for the country while private enterprise develops it. A big, monolithic organisation prone to corruption and inefficiencies is not benefitting Brazil.
7 T_Paine (#) Feb 21st, 2016 - 12:33 pm Report abuse
Feb 16 Brazilian state-run lenders are considering converting part or all of their outstanding loans to Petróleo Brasileiro SA into equity in a bid to help the embattled oil producer, two sources familiar with the plan told Reuters on Tuesday.

PetroBras is going into bankruptcy.
8 Klingon (#) Feb 21st, 2016 - 12:37 pm Report abuse
Of course Shell wants to swoop it and buy the contracts cheap while oil is in the gutter, makes perfect sense.
9 L0B0MAU (#) Feb 21st, 2016 - 05:45 pm Report abuse
What do you mean, PB is going into bankruptcy?

It's bankrupt ALREADY!

10 Jack Bauer (#) Feb 22nd, 2016 - 04:13 pm Report abuse
@3 BR asshole

“The oil belongs Brasil. Not to Petrobrás or Shell. ”

Well, you got it half-right, you a.hole, but only half-right. Sure the oil belongs to Brazil, in the sense that the bulk of the revenue produced by it (not very much, nowadays), goes to Brazil, regardless of the company that extracts it........but at the moment, it is pretty obvious that PB doesn't have the necessary means (capital) to develop new oil wells..... so unless foreign companies become involved, Brazil's oil industry will go to the dogs.
11 ChrisR (#) Feb 22nd, 2016 - 07:14 pm Report abuse
@ 10 Jack Bauer

Shell are far from being stupid.

They know PB is fucked as a duck and are circling over the carcase.

PB have NOTHING but this sort of deal to entice foreign investment to get PB out of the mire long term.
12 Jack Bauer (#) Feb 23rd, 2016 - 05:05 pm Report abuse
@11 ChrisR
Exactly.....all that PB has to sell now, is 'potential'.....
13 Hepatia (#) Feb 26th, 2016 - 01:37 am Report abuse
Irrespective of what PBR thinks the Brazilian government, acting in the national interest of Brazil, should resist this move.

This article gives important contextual information:
14 ChrisR (#) Feb 26th, 2016 - 01:05 pm Report abuse
@ 13 Hepatia 'The Stupid One'

Assange will be in the Embassy for another 25 years!
15 Jack Bauer (#) Feb 27th, 2016 - 10:48 pm Report abuse
@13 Hepatitis
First of all, learn how to write English correctly, you dope.
Second, the fact that the NSA spied on the fat Rouseff and PB, has nothing to do with the situation the Company and Brazil are's no use trying to create falsehoods to divert attention from the real problems, which btw, is what stinking populist socialist goverments do to cover up the shit they produce.

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