| SAO PAULO, June 26
SAO PAULO, June 26 Brazil's Petrobras may have
to pay as much as 22 billion reais ($10 billion) by 2018, or 50
percent more than first announced, for new offshore oil rights
that a cash-hungry government decided to sell the state-run oil
company on Tuesday.
The analysis of the transaction by Reuters is based on the
top of a range of oil price forecasts by the U.S. Energy
Information Agency (EIA) and exchange-rate estimates collected
by Brazil's central bank.
On Tuesday, the government said that Petrobras will pay 15
billion reais by 2018, with 2 billion reais coming into its
coffers this year for 9.8 billion to 15.2 billion barrels oil
and equivalent natural gas rights in four offshore prospects.
The upper level is equal to Brazil's total proven oil reserves.
That oil is in addition to the 5 billion barrels of oil
rights Petrobras bought from the government in an oil for stock
swap in 2010, but estimates of the amount of oil in the areas
has grown since then.
The government's estimate is based on a average exchange
rate of 2.20 reais to the dollar and Brent crude oil
priced at $105 per barrel.
Even though Petrobras is getting the new rights for far less
than it paid in 2010, investors reacted negatively. Since
Tuesday, Petrobras shares have fallen 5.4 percent. The company,
the world's most indebted and least profitable oil major, has
seen production fall despite spending more than any other oil
company on expansion in recent years.
The amounts coming to the government after the initial 2
billion reais payment, would be considered pre-payments of the
government's share of all oil produced and would be equal to 61
million barrels of oil, the government said. All those payments
will come years before any of the new oil is produced.
The value of that oil would be based on the price of Brent
crude in the month before the payment and converted at the
current exchange rate.
If the price of oil rose to $148 a barrel in 2018, as the
top EIA estimate predicts, and the exchange rate weakens to 2.60
to the dollar in 2018, as indicated by Brazil central bank
estimates, Petrobras pays about 22 billion reais.
At the lowest EIA forecast of about 69 dollars a barrel in
2018, Petrobras would see its projected payment to the
government fall to 12.1 billion reais.
Adriano Pires, head of the Brazilian Infrastructure Institute
considers the lower estimate more likely, but still worries that
the contract with the government links its financial fortunes to
variables it cannot control.
"Petrobras is a hostage to the price of oil and the exchange
rate," he said. "The government is betting that oil output will
grow and that the excess will finance the company, but there are
doubts about the how much Petrobras production will advance."
($1 = 2.20 Brazilian reais)
(Additional reporting by Marta Nogueira; Writing by Jeb Blount;
Editing by Eric Walsh)