November 11, 2010 / 6:35 PM / 9 years ago

FACTBOX-Details on Petrobras' capitalization plan

Nov 11 (Reuters) - Brazilian state oil company Petrobras in September issued $70 billion in shares as part of a fund-raising effort to finance an ambitious deep-water oil exploration campaign.

Petrobras used $43 billion of that stock to buy rights to 5 billion barrels of offshore crude from the government, the company’s controlling shareholder, as part of an oil-for-shares swap. Minority shareholders participated in the operation by buying shares.

The basic outline of the operation is as follows:

* SHARE ISSUANCE: Petrobras in September sold 1.87 billion new preferred shares (PETR4.SA) at 26.30 reais each and 2.4 billion new common — or voting — shares (PETR3.SA) at 29.65 reais each.

The company received about $26 billion in cash and bonds from a combination of private investors and state-run banks.

* RIGHTS TRANSFER: Petrobras gained rights to produce 5 billion barrels of oil distributed in at least six offshore fields buried under the ocean floor in a deep-water region known as the subsalt.

The government and Petrobras agreed to price the oil at an average of $8.51 per barrel, above market expectations of $5 to $6.

About 60 percent of the crude will come from the giant Franco discovery, with the rest coming from Tupi South, Tupi Northeast, Florim, Guara East, and Iara.

A seventh field, known as Peroba, will be held in reserve in case the other six fields do not yield 5 billion barrels.

Most of the fields to be used are adjacent to other discoveries in the subsalt region.

* FIELD DEVELOPMENT: Petrobras will explore and produce oil from the fields with no private partners. It will pay royalties on oil pumped from those fields, but will not pay Brazil’s Special Participation tax of up to 40 percent on high productivity fields. ($1=1.72 reais) (Reporting by Rio de Janeiro and Sao Paulo newsrooms; Editing by Lisa Von Ahn)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below