| NEW YORK/RIO DE JANEIRO
NEW YORK/RIO DE JANEIRO Aug 19 EIG Global
Energy Partners LLC is interested in buying more assets from
troubled Brazilian tycoon Eike Batista, a person familiar with
the U.S. investment company's plans said days after it closed a
$544 million deal that gives it control of a major new port.
EIG, however, is not actively negotiating with Batista's Rio
de Janeiro-based EBX Group, said the person, who declined to
specify which assets the $12.8 billion investment-management
firm has its eye on.
Forced by debt woes to dismantle an energy, port and mining
empire that had been worth $35 billion last year, Batista is
seeking partners or buyers for oil company OGX Petróleo e Gás
Participações SA, iron ore miner MMX Mineração e
Metálicos SA, shipbuilder OSX Brasil SA
and coal miner CCX Carvão da Colombia SA.
EIG declined to comment. EBX executives were not immediately
available for comment late on Sunday.
EIG, seeking to profit from a Brazilian oil rush, said last
week it will buy 1.3 billion reais ($544 million) of new stock
in port operator LLX Logística SA to help complete
the Port of Açu, a giant complex north of Rio de Janeiro. EIG
approached Batista about a possible deal for the port around six
to seven weeks ago, the person said.
The port will ease transport bottlenecks for Brazil's
commodities producers and provide a home for factories, power
plants and oil storage and processing facilities. It will also
serve as a base to help develop a giant new offshore oil play
known as the Brazilian subsalt.
Last year, EIG also agreed to invest 500 million reais, then
worth $280 million, in Sete Brasil, which is building 28
deep-water drilling rigs for Brazil's state-led Petroleo
Brasileiro SA, or Petrobras.
EIG got the LLX assets for a fraction of what they could be
worth if the Port of Açu realizes its potential. Companies such
as U.S.-based General Electric Co, which builds power
plants for offshore oil platforms, and France's Technip
, a major offshore oil engineering contractor, have
agreed to buy land at the port.
EIG expects the Port of Açu will be busy serving Brazil's
state-led Petroleo Brasileiro SA, or Petrobras and
partners such as Britain's BG Group Plc and Spain's
The subsalt oil reserves they have discovered, named for
their location beneath a layer of salt, runs along Brazil's
coast near Rio de Janeiro and may contain 100 billion barrels of
oil, according to the Brazilian Petroleum Institute at Rio de
Janeiro-State University. That's enough to supply more than 14
years of U.S. needs at current consumption levels.
"The landing point for all of that oil is Açu port," the
person said. "It's a crown jewel."
Many expect the region to attract more than $500 billion of
investment over the next decade and that Brazil will as much as
triple output to more than 6 million barrels a day, helping
Brazil surpass the United States as the world's No. 3 oil
producer after Saudi Arabia and Russia.
This isn't the first time EIG has been in the spotlight in
the wake of a corporate melt-down. In the weeks before
Chesapeake Energy CEO Aubrey McClendon was stripped of his
chairmanship over his personal financial dealings, he arranged
an additional $450 million loan from EIG, a long-time backer of
McClendon's and Chesapeake's. In total, EIG since 2010 lent
McClendon $1.33 billion.
EIG, which was spun out of the Los Angeles-based bond
investor TCW in 2011, has not made any personal loans to
Batista, the person said.
When restructuring of EBX ends, Batista will be left with
between $1 billion to $2 billion of assets and $1.7 billion of
long-term debt, a person who has direct knowledge of EBX plans
has told Reuters. His empire once was valued at over $60