{"id":105996,"date":"2014-01-15T07:44:20","date_gmt":"2014-01-15T07:44:20","guid":{"rendered":"http:\/\/rinf.com\/alt-news\/breaking-news\/brazils-petrobras-sells-off-peruvian-stake-to-china\/"},"modified":"2014-01-15T07:44:20","modified_gmt":"2014-01-15T07:44:20","slug":"brazils-petrobras-sells-off-peruvian-stake-to-china","status":"publish","type":"post","link":"http:\/\/rinf.com\/alt-news\/breaking-news\/brazils-petrobras-sells-off-peruvian-stake-to-china\/","title":{"rendered":"Brazil\u2019s Petrobr\u00c3\u00a1s sells off Peruvian stake to China"},"content":{"rendered":"
\n

<\/h3>\n

\n By
\n C\u00c3\u00a9sar Uco
\n
15 January 2014
\n <\/h5>\n

As part of a strategy to concentrate its activities in the domestic arena, Brazil’s national oil company, Petrobr\u00c3\u00a1s, decided to sell its entire stake in three Peruvian oil and gas fields to PetroChina for the amount of US$2,600 million, according to the Hong Kong Exchange.<\/p>\n

For Petrobr\u00c3\u00a1s, the deal is part of an initiative to bolster a company that is highly leveraged. The plan includes freeing up US$9.9 billion in assets from Per\u00c3\u00ba, the Gulf of M\u00c3\u00a9xico, and Africa to invest them in the exploitation of offshore oil fields, along Brazil’s Atlantic Coast\u2013including the Libra field, with estimated deposits of between 8 and 12 billion barrels, the largest submarine site in Brazil, located in the rock underground three miles below the Atlantic Ocean. This strategy dovetails with plans enunciated earlier this year by Petrobr\u00c3\u00a1s CEO Maria da Gra\u00c3\u00a7a Foster for this energy firm, in response to dramatic drops in share values.<\/p>\n

According to the Bloomberg news agency, Petrobr\u00c3\u00a1s, one of the 15 largest oil companies in the world, is \u201cthe most indebted, publicly traded oil company.\u201d Bloomberg analysts confirmed that Petrobr\u00c3\u00a1s \u201chas been selling assets to help finance projects in Brazil’s deep waters.\u201d<\/p>\n

This is only part of the story. Petrobr\u00c3\u00a1s is the most indebted oil company in a country with an abysmal level of social inequality. For the government of President Dilma Rousseff, it means being under strong pressure to postpone social programs and prioritize debt payment. Financial investment assurance companies already treat Petrobr\u00c3\u00a1s debt as junk bonds, placing on it a high-risk premium. An attempt to transform some of that debt into equity took place in 2010 under conditions of global liquidity, with Petrobr\u00c3\u00a1s issuing US$70 billion worth of stock (mostly preferred stock with a guaranteed rate of return). This placed global capitalists at the head of the debt line and did not eliminate the problem.<\/p>\n

When Rousseff and the ruling Workers Party (PT) make phony promises that 85 percent of the profits from the Libra site will fund Brazilian social programs, one would have to see what is meant by \u201cprofits.\u201d An insurmountable barrier limiting the money available is that the oil giant operates like any other transnational company; consequently, its aims are to pay its bondholders, increase shareholder value and provide fat salaries to management (Gra\u00c3\u00a7a Foster, one of the world’s richest women, is paid US$500,000 a year, not counting her stock options). Little or no \u201cprofit\u201d is left after all that is siphoned out.<\/p>\n

Last June, Brazil was convulsed by marches of millions of people who came out to protest against poverty and the enormous amounts being spent on football stadiums for the 2014 World Cup instead of education, health care and basic infrastructure. Aside from empty assurances from President Rousseff, the biggest demonstrations in decades have had little or no impact on government policy.<\/p>\n

Reporting on Latin America as a whole, the Economic Commission for Latin America and the Caribbean (ECLAC) has noted that the region continues to show the highest socio-economic inequality in the world, with Brazil leading the pack. To the extent that they are dependent on Petrobr\u00c3\u00a1s revenues, palliative measures, such as cheap fuel, better educational opportunities, housing and food programs, are constrained by the demands from shareholders and debt holders for the lion’s share.<\/p>\n

The Libra auction was also preceded by revelations that United States and Canada conducted industrial espionage on the Brazilian Ministry of Mines through the NSA and the Canadian CSEC. Possibly on the basis of that information and unhappy with the terms of the auction, Exxon-Mobile, Chevron and BP declined to bid.<\/p>\n

Out of 40 that were originally expected, only 1 bidder showed up at the Libra auction: the consortium composed of Royal Dutch Shell and Total from France, plus Beijing-based CNPC and CNOOC.<\/p>\n

While Petrobr\u00c3\u00a1s is forced to make a retreat from its investments, PetroChina expands its influence in a region rich in oil, gas, metals, and food.<\/p>\n

Like Petrobr\u00c3\u00a1s, the China National Petroleum Corporation (CNPC,) owner of PetroChina, is partially state-controlled, and obligated to its shareholders; in South America, it and its subsidiaries own oil properties in Venezuela, Peru and elsewhere. Globally, it is expected that by next March, PetroChina will buy a stake in the Eni SpA (ENI) natural gas field in Mozambique for US$4,200 million. And last September, it agreed to invest US$5,000 million in the Kashagan Oil project, located in Kazakhstan.<\/p>\n

Under constant pressure to recycle their dollar balances left over from the Chinese current account surplus, the surge in direct investments by Chinese investors and Chinese-owned companies in part replaces the drying up of investment opportunities in the United States and Europe, due to the 2008 financial collapse. Agreements have been made with Latin American nations on the Pacific Rim, including Chile, Peru, Mexico, Costa Rica and Nicaragua.<\/p>\n

In Peru, for example, the national newspaper La Rep\u00c3\u00bablica<\/em> recently indicated that China continues to acquire assets. A Chinese firm invested \u201cin the local mining project Bambas Glencore-Xstrata, an operation that could total US$6 billion.\u201d In fact, \u201cChinese companies could become the largest copper producers in Peru, the world’s third largest producer of copper.\u201d Among fisheries, \u201cChina Fishery achieved this year an agreement to acquire a majority stake in the firm COPEINCA, the second largest exporter of fish products in the country,\u201d said La Rep\u00c3\u00bablica<\/em> .<\/p>\n


\n
\n<\/p><\/div>\n

‘
\n \t\t \t];
\n \t\t \tvar html = htmlArray.join(”);
\n \t\t \t$(‘#page’).prepend(html);
\n\t\t\t$(‘#top-appeal’).animate({opacity:1.0},1000).slideDown(1000);
\n \t\t}
\n \t}<\/p>\n

\tfunction appendInlineAppeal() {
\n\t\tvar excludes = [ ‘wsws’, ‘twih’, ‘vide’, ‘sale’, ‘dart’, ‘task’, ‘powe’, ‘gmhv’, ‘raul’ ];
\n\t\tvar url = document.location.href;
\n\t\tvar filename = url.substring(url.lastIndexOf(“\/”) + 1, url.length);
\n \t\tif (!$(‘#content’).is(‘.width72,.category’) && excludes.indexOf(filename.substr(0,4)) == -1) {
\n \t\t\tvar htmlArray = [
\n \t\t\t\t‘<\/p>\n

‘
\n \t\t \t];
\n \t\t \tvar html = htmlArray.join(”);
\n \t\t \tvar pCount = $(‘#content’).children(‘p’).length;
\n \t\t \tvar position = Math.floor(pCount*0.1);
\n \t$(‘#content’).children(‘p’).eq(position).before(html);
\n \t$(‘#inline-appeal’).children(‘form’).children(‘.more-options’).children(‘a’).click(function() {
\n \t\t\t\t$(‘#inline-appeal’).children(‘.initially-hidden’).show();
\n \t\t\t\t$(this).parent().hide();
\n \t\t\t\treturn false;
\n \t\t\t});
\n \t\t}
\n \t}<\/p>\n

\tfunction appendBottomAppeal() {
\n \t\tvar excludes = [ ‘lect-a20’ ];
\n \t\tvar url = document.location.href;
\n\t\tvar filename = url.substring(url.lastIndexOf(“\/”) + 1, url.length);
\n \t\tif (!$(‘#content’).is(‘.width72,.category’) && excludes.indexOf(filename.substr(0,8)) == -1) {
\n \t\t\tvar htmlArray = [
\n \t\t\t\t‘<\/p>\n

‘
\n \t\t \t];
\n \t\t \tvar html = htmlArray.join(”);
\n \t\t \tif ($(‘#article-tools’).length > 0) {
\n \t\t \t\t$(‘#article-tools’).before(html);
\n \t\t \t} else {
\n\t \t\t \t$(‘#content’).append(html);
\n \t\t \t}
\n \t$(‘#inline-appeal’).children(‘form’).children(‘.more-options’).children(‘a’).click(function() {
\n \t\t\t\t$(‘#inline-appeal’).children(‘.initially-hidden’).show();
\n \t\t\t\t$(this).parent().hide();
\n \t\t\t\treturn false;
\n \t\t\t});
\n \t\t}
\n \t}
\n$(document).ready(function(){
\n appendTopAppeal();
\n \/\/appendInlineAppeal();
\n \/\/appendBottomAppeal();
\n});<\/p>\n

Source: WSWS<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By C\u00c3\u00a9sar Uco 15 January 2014 As part of a strategy to concentrate its activities in the domestic arena, Brazil’s national oil company, Petrobr\u00c3\u00a1s, decided to sell its entire stake in three Peruvian oil and gas fields to PetroChina for the amount of US$2,600 million, according to the Hong Kong Exchange. For Petrobr\u00c3\u00a1s, the deal […]<\/p>\n","protected":false},"author":1213,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[487],"tags":[],"class_list":{"0":"post-105996","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-breaking-news"},"_links":{"self":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/105996","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/users\/1213"}],"replies":[{"embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/comments?post=105996"}],"version-history":[{"count":0,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/posts\/105996\/revisions"}],"wp:attachment":[{"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/media?parent=105996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/categories?post=105996"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/rinf.com\/alt-news\/wp-json\/wp\/v2\/tags?post=105996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}