Petrobras tacks

13 August 2010 By Christopher Swann

The Brazilian oil giant will hold its first Englishdubbed call later today, as New York financiers dash to the Hamptons. The bad timing shouldn t preclude Petrobras from addressing hard questions on how it will avoid getting bullied by the government in its $85 bln capital hike.

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Brazilian oil giant Petrobras will hold its secondquarter earnings call at 5 p.m. Eastern Time on Friday, with simultaneous translation into English.

Meanwhile, a federal prosecutor said he has launched a probe to determine if state oil company Petrobras' oilforshares capital plan could harm public coffers, renewing doubts over the company's proposed share offering, Reuters reported on Aug. 12.

Any delay would deal a blow to Petrobras, which is depending on the plan to raise as much as $25 billion in fresh capital for its crusade to pump billions of barrels of oil from deep beneath the ocean's surface.

The company previously postponed the transaction by two months from its targeted July launch because of delays in the valuation of the crude reserves to be used. This pushed down the company's shares, which already had fallen because of uncertainty over the operation.

Brasiliabased public prosecutor Paulo Roberto Carvalho has launched an inquiry, his office said on Aug. 12. He has also asked the government corruption watchdog, the TCU, to look into whether the state would be harmed if Petrobras swapped its shares for oil reserves at a price of $5 to $8 per barrel.

A TCU ruling could create legal obstacles to the transaction, while the probe could slow the process by spurring public controversy over the valuation of the oil barrels.

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