2010 guide to Brazil: Drilling for the future
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2010 guide to Brazil: Drilling for the future

Petrobras’s recent record-breaking fundraising, which brought in a useful $70 billion, seems in some ways symbolic of Brazil’s bright prospects. Yet the issue was also controversial, providing further evidence for those who believe the role of the state in the Brazilian economy is too large and set to increase.

The $70 billion equity fundraising for Petrobras in September this year was the largest capital-raising in history – three times larger than the previous record. For Petrobras – and the Brazilian nation – it was a historic occasion and showcased Brazil’s global leadership in the wake of the financial crisis. Moreover, the use of proceeds of the issue – to develop Brazil’s huge pre-salt oil discoveries, so-called because they are beneath a moving layer of salt – highlighted the bright future expected of the country.

Theodore Helms, executive manager of investor relations at Petrobras

"What is crucial, however, is that Brazil’s great discoveries are coming after economic development is well under way"

Theodore Helms, Petrobras

"One of the remarkable aspects of the deal was how well it matched Petrobras’ expectations, as outlined in our last business plan covering 2010-14," explains Theodore Helms, executive manager of investor relations at Petrobras. Those plans showed spending of $224 billion and cashflow after dividends of $155 billion. "In other words, the amount of capital we actually raised was equal to what had been assumed in the plan. With the completion of the equity raising we have affirmed our ability to achieve our goals."

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