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Why are there Chances Of Brazil's State-Owned Oil Giant Petrobras Going Bankrupt?


But why has Petrobras — whose CEO Maria das Graças Silva Foster is one ofFORBES’ Most Powerful Women — gone from heaven to hell at the very moment when it is announcing some of its biggest oil discoveries, including those in its Libra field, whose estimates for production were recently updated to as much as 12 billion barrels, twice previous estimates?
Simply put, for Petrobras — as for any other oil company out there in the world, and Brazil’s own bankrupt OGX is an example of that — more oil means more investments and debt. Considering that Petrobras also has the world’s largest corporate spending program, valued at $237 billion, it also means more trouble.
Moody’s specifically cited “the growing government intervention in Petrobras” as one of the reasons for the agency to reassess its ratings. An example of that are the extra refineries added to Petrobras’ investment plan by request of the then President Lula da Silva. In a triumphant interview to newspaper Valor Economico published in 2009, the politician — who’s Dilma Rousseff’s, the current President of Brazil, mentor — said bluntly that Petrobras did not want to build refineries and also had a plan for meager investments in 2008. “Then I called the company’s Board,” said Lula. Outcome of his call: not one but four refineries were added to its investment plan, and oil production forecasts were revised up for fantastic numbers.



http://www.forbes.com/sites/andersonantunes/2013/12/10/what-are-the-chances-of-brazils-state-owned-oil-giant-petrobras-to-go-bankrupt-32-to-be-precise/

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