FROM SCRATCH NEWSWIRE

SCAVENGING THE INTERNET

BRAZIL GOV’T IN TALKS ON SUBSALT OIL INVESTMENTS

Posted by Gilmour Poincaree on December 11, 2008

Monday, December 08, 2008

by Jeff Fick – Dow Jones Newswires

PUBLISHED BY ‘THE RIGZONE’

RIO DE JANEIRO – Brazil’s government is in talks with a variety of potential investors – besides China – to finance investments in the Mines and Energy Minister Edison Lobaocountry’s promising subsalt oil deposits, the country’s mines and energy minister said Monday.

Mines and Energy Minister Edison Lobao told the local Estado news agency that “it’s not only China. There are a range of opportunities that Petrobras has.”

Lobao confirmed press reports Monday that the Chinese government had offered Brazilian state-run energy giant Petroleo Brasileiro $10 billion to fund subsalt oil development – and that was just to start.

According to Lobao, other possible funding could come from the United Arab Emirates, Japanese groups and Canadian banks. In addition, financing could be arranged with oil-exploration equipment suppliers that have their own sources of financing, Lobao said.

“Petrobras is a solid company. It has a prestigious history abroad. There is no safer investment than in Petrobras,” Lobao said.

“Petrobras will not have any problems. The financing sources will be generous, whether they are domestic or foreign,” the minister added.

The Brazilian government would also consider using its $200 billion in foreign reserves to help finance Petrobras’ investments, Lobao BRAZIL'S SUBSALT BASINSsaid.

“It’s a possibility. It’s a decision that will be made by the government. If Petrobras one day needs it, we could help with these reserves. They’re just sitting there,” Lobao said.

Such financing could help Petrobras overcome a tight credit market and falling international oil prices, which experts and analysts have speculated could slow down development of the subsalt reserves. Full development of the region has been estimated to cost as much as $600 billion.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE RIGZONE’

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