it has now absorbed an immense $70 billion in oil investments that will not be going to Iran
Petroleo Brasileiro SA, or Petrobras, the South American nation’s state-run energy company, raised $70 billion Thursday through the sale of more than four billion common and preferred shares in Brazil.
The money will fund Petrobras’ ambitious $224 billion, five-year plan to develop offshore fields Petrobras discovered in the last three years that hold more than 50 billion barrels of recoverable oil.
If successful, Petrobras will vault itself and Brazil into the top tier of oil and gas producers. However, some analysts are concerned that the cost, and an increased role for the bureaucratic Brazilian government, could dampen eventual returns for shareholders.
Petrobras forecasts that by 2014 it will produce the equivalent of 3.9 billion barrels of oil per day when natural gas output is included. That’s equal to what Exxon Mobil Corp., the world’s largest publicly traded oil and gas company, produces today. The increase in market value, to about $220 billion, already moves Petrobras past Royal Dutch Shell PLC and Chevron into second place behind Exxon’s $311.36 billion.
According to the U.S. Energy Department, Brazil is the No. 12 oil producer in the world. If Petrobras hits its targets, Brazil would jump to No. 6, behind Saudi Arabia, Russia, the U.S., Iran and China. This assumes production in those countries stays relatively flat.