Tag Archives: Oil

Petrobras Sells $11 Billion in Bonds: Highest sale ever in Latin America

Energy, , , , ,

On Monday, Brazil’s powerhouse state-run energy firm Petroleo Brasileiro SA (Petrobras) unloaded $11 billion of global debt in what’s been reported as the largest bond offering by a Latin American company in history. The deal was split six ways, with maturities ranging from 3 to 30 years, of both fixed-rate debt and floating-rate debt. According to inside sources, investors made bids as high as $50 billion for the bonds, demonstrating a strong demand for these types of high-rated emerging market companies.

Petrobras confirmed that it has already received more than half of its $20 billion goal this year, which will be slated for investment in oil production and expanded exploration in the near future. The Brazilian oil firm also announced it has plans on spending $237 billion over the next four years in what many analysts say will be the largest corporate investment plan by a single company in the world.

The last time Petrobras sold debt, in February 2012, the company raised $7 billion, which by all standards was still a significant achievement. They did this by offering bonds comprised of four different maturities, in a similar spit as their most recent venture this Monday. With this move, timing is everything. Petrobras is also expected to participate in a Brazilian oil and natural gas rights auction later this week, putting it in a great position after Monday’s bond sale.

 

This latest deal was facilitated on a massive scale by many of the world’s top financial institutions, including the Bank of America Corp., Banco do Brasil SA, Citigroup Inc., HSBC Holdings PLC, Itaú Unibanco Holding SA, JPMorgan Chase & Co., and Morgan Stanley & Co. The sale also had an effect on the global currency market, driving up the value of the Brazilian Real, increasing 0.6%, and making the only positive motion against the dollar by a major currency. The Real is rallying on speculation Petrobras will exchange some of the money it raises from Monday’s bond sale into local currency.

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Mexican tycoon Carlos Slim looking at oil in Colombia

Energy, Finance, Resources, , , ,
Mexican billionaire Carlos Slim said he is looking towards Colombia’s oil industry, as the world’s richest man boosts infrastructure investments outside his home country.
“We are looking at opportunities in other countries that look interesting to us. In Colombia we know that there has been a lot of investment. The government is actively looking at the development of the oil industry and is promoting other investments,” Slim said in an interview with Bloomberg television aired on Thursday.
Colombia has experienced a boom in oil and mining investment since a 2002 U.S.-backed crackdown against leftist rebels. A flood of new players has emerged to take advantage of government policies meant to attract fresh cash.
The South American nation is also the world’s No. 5 coal exporter, but a series of mining explosions that killed dozens of workers over the last year have prompted calls for stricter government oversight at a time when Colombia’s mining sector is enjoying a mini-boom.
Colombia said on Wednesday it could extend a suspension of new requests for mining concessions for up to one year due to the recent accidents in the industry.
Ranked the world’s richest man by Forbes magazine, Slim spun off shares of his miner Frisco last month, betting on future demand for metals such as copper and gold as commodities prices around the world soar.
“I think the prices of primary products in the next years will have a bigger demand by a population that is getting out of poverty and is getting involved in the market,” Slim said in the interview, held in New York.
Frisco has said it will continue searching for more exploration land as it starts operations at five of its existing mines across Mexico during 2011 and 2012.
Slim told reporters two weeks ago that he is funneling 10 billion pesos into Frisco this year and another 13 billion pesos more into his infrastructure firm Ideal.
The entrepreneur also owns Swecomex, which provides engineering and platform construction services for the oil industry in Mexico, with state-run giant Pemex a key client. However, Slim has stayed away from costly and labor intensive deep water exploration in the Gulf of Mexico.
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