Brazil may have massive amounts of offshore oil but

Maritime News
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doesn’t mean they know how to produce it like we can in the GoM…

[B]Brazil Oil Boom – A Failure to Launch[/B]

By MarEx September 20, 2013

Just a couple of years ago, the Brazilian economy was soaring at 7.5% a year. Petrobras was strategically positioned at the top of global oil production and Eike Batista was destined to become the richest man in the world. But, what happened?

Today, the Brazilian economy is growing at 1% as of last year. Petrobras is mounted with huge debt and lots of non-producing projects. Batista, with a fortune once estimated to be around $35 billion has fallen on hard times; he is estimated to have to only $4.8 billion left.

Many say it’s the government that has strapped Petrobras with too many mandates like building offshore vessels and tankers, oil platforms in Brazil. It also wants more than 50% of oil field workers and mariners to be Brazilian.

In an effort to keep unemployment low, the government began dictating to Petrobras how it must operate and whom it had to put to work. And as its ability to produce oil fell, Petrobras and the government began importing foreign gas to keep up with demand — but they had to sell it at a loss.

Meanwhile, the United States began ramping up its production of shale oil and gas led by LNG. While the U.S. redraws the global petroleum map, Brazil has shale but it is focused on offshore production and falling sorely behind and deeper in debt.

Recently, Exxon, BP and BG Group passed on bidding on Brazil’s upcoming October 21st auction of its Libra field, which is estimated to be Brazil’s biggest oil find yet. In fact, rig operators have also become disenchanted with Brazil’s oil production as Transocean and Diamond Offshore began retreating. Transocean began stacking rigs and Diamond cannot get paid by Batista’s OGX Petroleo e Gas SA.

Americans still remain the world leaders in offshore. We pioneered the shallow water and exploring and producing from the depths. WE ARE NUMBER ONE!

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That government is shit and so are the workers down there. Don’t get me started! Biggest bunch of idiots I have ever seen!

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They are DEFINITELY not ready for PRIME TIME!

I wonder if any of this is sinking in to Petrobras big wheels? They need American know how to reach their true energy potential but with their draconian protectionist policies they ain’t NEVER gonna get there!

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I love this one…Petrobras can’t even move now without the Brazilian gooberment pouring money into them!

[B]Brazil Ready To Finance Petrobras In Offshore Oil Auction[/B]

By Reuters On September 21, 2013

reuters_logo1RIO DE JANEIRO, Sept 20 (Reuters) – Brazil’s government plans to finance state-run oil company Petroleo Brasileiro SA’s participation in the Oct. 21 auction of Libra, country’s largest-ever oil discovery, the Estado de S. Paulo daily newspaper reported on Saturday.

The government is also considering other measures to help cash-strapped Petrobras, as the company is known, pay for the large investments it is required to make in Libra under a 2010 Brazilian oil law, Estado reported citing an unnamed government source.

These measures include the raising of Brazilian fuel prices, reduction of dividends on the government’s shareholding in Petrobras and changes to the terms of a 2010 oil-for-stock swap, Estado said.

Petrobras Chief Executive Officer Maria das Graças Foster said this week that Petrobras has the capacity to explore and produce 100 percent of the oil from Libra, but does not have the financial capacity to cover the investments needed to develop the area, Estado said.

Under the oil law, Petrobras will have to come up with 4.5 billion reais no matter which of 11 companies signed up for the auction win the offshore area, the paper said.

The payment is Petrobras’ minimum share of the 15 billion real up-front fee winners will pay Brazil for the rights to Libra. The winning bidder will be the company or group that gives Brazil’s government the biggest share of Libra’s future output to sell on its own account.

Under the law, Petrobras must take a minimum 30 percent stake in the winning group and lead exploration and development in the area as the group’s operator.

Petrobras must also supply at least 30 percent of the estimated 400 billion reais ($180 billion) over 35 years that the government believes will be needed to develop the area. Libra, Brazil’s largest-ever oil discovery, has an estimated 8 billion to 12 billion barrels of oil, enough to supply world needs for three to five months.

Decreasing output from older offshore oil fields, delays in bringing on new areas, and government refusal to let the company charge Brazilians world prices for gasoline, diesel fuel and cooking gas has crimped revenue and forced the company to borrow more to pay for investments.

The Rio de Janeiro-based company is also in the middle of a $235 billion five-year expansion plan. That plan, the world’s largest corporate spending program, does not include spending for Libra.

On Thursday, the government said the Libra auction attracted only a quarter of the interest expected after many large, wealthy oil companies with experience in the region declined to sign up for the sale.

With ExxonMobil Corp, BP Plc, BG Group Plc , Chevron Corp and other investor-owned oil companies choosing to stay away, Asian state-owned companies, such as India’s Oil & National Gas Corp Ltd, Malaysia’s Petroliam Nasional, or Petronas, and China’s CNOOC Ltd, dominate the list of 11 companies that agreed to pay the 2.05 million real ($931,818) registration fee.

Magda Chambriard, head of Brazilian petroleum regulator ANP, said on Thursday that she had expected “more than 40″ companies to bid for Libra.

Petrobras officials were not immediately available for comment. Brazilian government officials at the Presidential Palace and Energy Ministries were not immediately available for comment.

With all the protections that Petrobras has in place in Brazil, they still can’t compete. They need to sell all their holdings in the GoM and get out of our waters. If they can’t make it in their own country, they don’t belong in ours!

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My uneducated opinion is their economic prosperity on a whole will be a big bust long-term. Too good to be true, too big, too fast. Agreed %100!

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“Brazil may have massive amounts of offshore oil but…”, but unfortunately they have massive amounts of Brazilians.

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[QUOTE=captrob;120980]“Brazil may have massive amounts of offshore oil but…”, but unfortunately they have massive amounts of Brazilians.[/QUOTE]

Booooooooom.

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somehow I am stuck with an association between the words Brazil and Lizard in my head now…anyone know how I can get it out of there?

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I can tell you from experience, They are as Fuc%^# up as a Soup Sandwich down there… That’s why…

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[QUOTE=c.captain;120992]somehow I am stuck with an association between the words Brazil and Lizard in my head now…anyone know how I can get it out of there?[/QUOTE]

You can dislodge it with something more intrusive and annoying

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I remember a couple of years ago that my boss was talking to us about the company’s experiences in Brazil. He said that the only thing that Brazilians liked better than fucking was stealing. I loved it. Best thing is, my chief was born in Natal and he’s the first one to agree.

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You just complete effed up my coffee time. Thanks!

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[QUOTE=catherder;121016]You just complete effed up my coffee time. Thanks![/QUOTE]

Me too. I should have followed my first instinct NOT to click on the link!

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[QUOTE=jdcavo;121007]You can dislodge it with something more intrusive and annoying[/QUOTE]

WTF? I want my money back! They don’t look like Brazilian lizards at all!

I did like the beer waterboarding part though and I need to add that I personally AM NOT a happy boy!

in fact, if there is a single photo which defines who the c.captain really is, it is this one…

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So far, I guess I have been lucky. With over 90 brazilian crew to manage, some are really good, some really inexperience, some useless - about the same percentage I’ve had anywhere else I suppose.

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more on the stoopid telenovella saga of Eike Batista and his ridiculous house of cards

[B]Six Lessons From Blowing $30 Billion in Brazil[/B]

By Raul Gallegos

Oct. 2 (Bloomberg) — Brazil’s OGX Petroleo & Gas Participacoes SA, the flawed jewel of ex-billionaire Eike Batista’s EBX conglomerate, is one step closer to bankruptcy after missing a $45 million dollar debt payment that was due yesterday. If OGX goes under, its largest U.S. creditors, Pacific Investment Management Co. and BlackRock Inc., stand to lose millions in Latin America’s largest corporate default. Batista’s salesmanship and Brazil’s growth boom drew investors to his over-hyped companies. The warning signs they missed offer precious investing lessons.

  1. Avoid companies no one understands. Batista’s EBX is a head-scratching maze of 13 interconnected startup companies, and only six of them are publicly listed. For instance, OGX was the main client of shipbuilding unit OSX Brasil SA. OSX in turn leased space from Batista’s port operator LLX Logistica, another sister company. As one company ran into trouble the others did as well. Even Batista’s employees couldn’t figure out the corporate puzzle. A company spokesman once confessed to having trouble keeping up with the new companies Batista created.
  1. Beware shoddy transparency. The EBX holding company and six other unlisted units never disclosed their finances. These black-box businesses were impenetrable, making it hard to understand how their financial status affected the related, publicly traded units. The veil obscured deals Batista struck with a host of partners, notably Abu Dhabi’s Mubadala Development Co.’s investment in EBX holding. These practices blindsided minority investors as Batista’s edifice began to crumble.
  1. Watch out for revolving-door executives. Batista replaced his top executives as often as he alternated between jets of his once-growing personal plane collection. OGX replaced its chief executive officer, chief financial officer and its oil exploration chief twice in 2012 alone. This past month, OGX fired its CFO again and hired a fifth debt-restructuring adviser. Short tenures make it hard for executives to deliver sound results, a symptom of bigger problems at the top.
  1. Mind the gap between goals and reality. Batista never delivered on his grandest promises. LLX’s Manhattan-sized Acu Superport project on Brazil’s southeast coast suffered years of delays before Batista sold it last month. OGX’s Tubarao Azul offshore field, where the company aimed to pump 20,000 barrels of oil a day, produced less than half that amount last year before OGX finally declared the wells non-viable in July. In May, Batista’s cash-strapped flagship company even bid for — and later relinquished — new fields it couldn’t possibly develop. Some CEOs may like to daydream, but that’s a luxury prudent investors can’t afford. Which brings us to…
  1. Value CEOs who are solid managers, not just good salesmen. Batista is great at selling — dreams, that is. He turned his opulent lifestyle and his photo ops with Brazil’s President Dilma Rousseff into credibility he used as currency. But his management skills fell short. Batista earned a reputation as a micromanager who struggled to delegate decisions to his ever-changing staff. This may be tolerated in the face of successful results, but aggressive sales with poor execution soon hurt business.
  1. CEOs with overgrown egos can cause outsized problems. Batista has an ego the size of an offshore oil rig. Last year he vowed to surpass Mexico’s Carlos Slim to become the world’s richest man. And he suggested that Brazil should erect a statue in his honor. Self-involvement can make leaders forget where their interests end and where their duty to others begins. When his son Thor ran over and killed a cyclist in Rio de Janeiro in March 2012, Batista blamed the cyclist on Twitter and had an EBX spokesman defend his son in public.

Batista’s value destroying touch has become more evident as he divests assets the market still deems of value. For example, LLX shares rose more than 50 percent after he announced the sale of the company. Batista may want more time and money to fund OGX’s remaining oil ventures, but he will be hard-pressed to get it. Following this series of debacles, sensible investors will probably steer clear of a man who over-promised and under- delivered.

Just as the man said…Brazil is a great place except for all the Brazilians there

.

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[QUOTE=c.captain;120901]doesn’t mean they know how to produce it like we can in the GoM…

Americans still remain the world leaders in offshore. We pioneered the shallow water and exploring and producing from the depths. WE ARE NUMBER ONE![/QUOTE]

Hehehehe

:slight_smile:
Pioneered is the word, leading not so much.

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the next episode of the telenovela just released

[B]Brazil’s OGX Misses $45M Payment on Bond[/B]

by Reuters

SAO PAULO, Oct 1 (Reuters) - OGX Petróleo e Gas Participações SA missed a $45 million interest payment due on Tuesday, moving the debt-laden Brazilian oil producer closer to the largest Latin American corporate debt default ever.

The company, controlled by embattled Brazilian tycoon Eike Batista, failed to deposit the money in bondholder accounts and plans not to do so during the 30-day grace period it has to remain current on its debt, the company said in a filing.

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Hi! New to the board. I read the Bloomberg article on Eric Batista that mentioned that the status of some of the deep sea reserves off Brazil had been downgraded from “confirmed” to “prospective”; that he had ceased development of a number of fields because the oil was economically unrecoverable; and that one producing well, predicted at 10,000 to 40,000 bbls./day came in at 10,000 and was shut down quickly as pressure dropped. All of which leads me to the question, “Is there really a substantial amount of oil there?” - or - “Is the oil there, though substantial, recoverable in the foreseeable future considering costs and available technology?”

Brazil has always lusted for oil. It’s the one key resource in which it is deficient. I remember back in the 'sixties that the winning samba melody in the Salvador Carneval, in addition to singing about women and happiness, also rhapsodized about how, “the oil is just about to gush out of the ground.” It didn’t happen back then and I wondered how much of the current brouhaha about the deep sea deposits might be more Brazilian wishful thinking.

Do you folks know?

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[QUOTE=Kraken;121916]Hehehehe

:slight_smile:
Pioneered is the word, leading not so much.[/QUOTE]
The US biggest in everything including debt, thats not a bad thing as its a huge economy, but when you have to continually borrow more and more to pay the interest bill…its gunna get ugly one day?

I Guess Obama said it best ’ we all know a ponzi scheme has to continually get money to survive so show me the money"

And I agree Brazil will get ugly soon too, have you seen the way they eat??
The polite description is everything takes 30% longer to do and cost 30% more…