The Rising Influence of Rising Affluence

[DewDiligence]

Political meddling in PBR is intractable insofar as the federal government of Brazil has control of the voting shares; the latest:

http://online.wsj.com/articles/petrobras-ceo-no-capital-increase-seen-before-2030-1404229898

Concerns about political meddling in the company's decision-making were renewed last week when Petrobras signed an unexpected deal with the Brazilian government. The agreement gives the company production rights for an additional 10 billion to 15 billion barrels of offshore oil reserves.

…The no-bid agreement grants Petrobras expanded production rights to four deep water oil fields off the coast of Brazil. Petrobras will have to pay a signing bonus of 2 billion reais ($910 million) to the government this year, plus an estimated 13 billion reais in oil over the next four years.

…Analysts acknowledged the potential long-term…but some also expressed concern about the timing of the announcement, coming four months ahead of presidential elections in which Ms. Rousseff will seek a second term [LOL].

Brazil’s pre-salt production now exceeds 500K bbl/day.

See #msg-100710615 for related info.