Wednesday, 17 September 2008

BrazOil Update: Is the US financial malaise going to burst Brazil's economic bubble?

One of Brazil's leading newspapers, "O Estado de Sao Paulo" reported earlier today that Petrobras may have difficulties financing offshore projects if the U.S. financial crisis worsens. Indeed, the company's share price dropped from 4.6% to 29.87 reais. This did not, however, prevent the company's head of exploration and production to say that he expects the company to be producing 1.126 million barrels a day of oil equivalent from its new 'pre-salt' fields by 2017. Petrobras' strength is thus unlikely to be affected by the U.S. financial malaise - perhaps financial cancer is a better term. Indeed, domestic monthly oil output rose to a record high in August after production was raised at two wells and another platform entered into service.

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