Petroleo Brasileiro SA (NYSE ADR: PBR), the Brazilian national oil company better known as Petrobras, announced Wednesday that it had agreed to issue $42.5 billion in new stock to the Brazilian government to obtain the rights to five billion barrels of oil in offshore fields.
Petrobras will pay an average of $8.51 a barrel for the oil after almost two weeks of negotiations with the government, according to a regulatory filing. More than half the oil will come from the Franco field in the offshore Santos Basin, the company said.
Even though the company paid what is seen by many analysts as a premium for the rights, the deal is the linchpin for the Latin American oil giant's long-term financing plans.
Money Morning Mailbag: Relief Wells Near Finish, But Oil Spill Blame Game Continues
While BP PLC (NYSE ADR: BP) closed in this week on finishing relief wells to permanently plug the oil spill, stormy weather threatened to delay the final steps as clean up crews were called in to shore.
BP capped the blown-out Macondo well last week and has been conducting pressure tests to ensure the cap's strength. A relief well is close to completion but work has been halted until the storm passes. All work could be stopped for 10 - 14 days if the area is evacuated.
While the leak may finally be close to plugged, the financial aftermath is far from over. Corporate entities and the U.S. government continue to point fingers at each other.
New Technology Turns Coal Into Clean, High-Powered Gas
[Editor’s Note: Money Morning recently conducted a Q&A with Dr. Kent Moors on the future of energy. Dr. Moors last wrote about Marcellus Gas Shale, a new energy-sector profit play.]
A new fuel technology – unveiled just two weeks ago – is about to revolutionize the energy business.
I saw it firsthand.
General Electric Co. (NYSE: GE) asked me to present “The Future of Natural Gas” at the company’s Gas Turbine Symposium in Greenville, S.C. That’s where GE revealed a new generation of its market-leading turbine technology.