In talks: Jose Sergio Gabrielli
Petrobras eyes cash-for-oil deals
Brazilian state-run giant Petrobras is in talks with oil consumer countries about the possibility of getting financing from them in exchange for future guarantees of oil supply, company boss Jose Sergio Gabrielli.
"It's a mechanism of guaranteeing supplies over the long term. To the extent that some countries find this important, they can negotiate some financing (for Petrobras)," he told Reuters in Sao Paulo.
Petrobras is seeking cash to help it appraise and develop large new discoveries of high-grade light oil and natural gas in its pre-salt play.
Analysts estimate the sub-salt reserves could contain up to 80 billion barrels of oil, catapulting Brazil into the top 10 of global oil producers.
The company's finance director Almir Barbassa told Reuters this is the first time Petrobras had negotiated this type of financing.
"The opportunity arose, we consulted with some countries and felt a positive response. We are negotiating with three or four consumer countries," he said.
The state-run energy company announced last month it would raise its five-year investment plan by 55% at a time when large raw materials companies around the world are cutting back budgets in the face of falling prices and demand.
Petrobras said it plans to invest $174.4 billion from 2009 through 2013, compared with the $112.4 billion planned for investment for 2008-12. The company will invest $28.6 billion this year alone.
Gabrielli said in London this month that Petrobras was ready to cut investment plans or raise funds from sources it previously considered unattractive if it has difficulty meeting its cash needs next year.
On 4 February, it sold $1.5 billion in 10-year dollar-denominated bonds to finance part of its hefty investment plan, which has been challenged by a recent plunge in the price of oil.
Petrobras relies on capital markets to fund a significant part of its investment plan. The company is also in talks with suppliers to cut costs.