This week, the Wall Street Journal revealed that the U.S. government plans to invest US$2 billion in Petrobras, Brazil’s state-run oil company. It is the largest company headquartered in the Southern Hemisphere and the largest company in Latin America in terms of revenue. Its assets, which include oil assets in Brazil and 18 other countries, amounts to $133.5 billion.
The investment, which is in fact a loan, is to help Petrobras explore the Tupi basin off the coast of Rio de Janeiro, which could potentially make Brazil one of the world’s biggest oil powers. The investment will go towards offshore drilling activities to take place over the next several years.
According to the article, a preliminary commitment of $2 billion is on the table, though that amount may increase. However, some experts are scratching their heads about the idea of a loan from the ailing U.S. Treasury to cash-rich Petrobras.
Also this week, the New York Times reported that the Brazilian government is seeking more control over Petrobras in an effort to prevent foreign influence and to ensure national control over the Tupi oil field. However, the reform plan, which is being promoted by President Lula, faces strong opposition in Congress.
