January 11, 2014 / 12:30 AM / in 4 years

Brazil gives Batista's oil co. time to show financial viability

RIO DE JANEIRO, Jan 10 (Reuters) - Brazil’s oil regulator ANP extended until January 24 a deadline for businessman Eike Batista’s bankrupt Oleo e Gas Participações S.A. to show that it has the financial viability required to hold on to off-shore concessions, the company said on Friday.

The company, formerly known as OGX Petroleo e Gas Participações S.A., filed Latin America’s largest-ever bankruptcy protection petition on Oct. 30. It had requested more time to fend off creditors and shore up its finances through its operating contracts and concessions.

The regulator has told the company it can be bankrupt but it must meet its financial commitments to continue operating the off-shore fields.

On Thursday, Oleo e Gas said it had paid part of its debts in two offshore oil fields with the financial resources it obtained from an agreement reached with creditors in December.

The company owes partners QGEP and Barra Energia do Brasil Petróleo e Gas 73 million reais for operations in the Atlanta and Oliva fields.

QGEP and Barra each own 30 percent of the Santos basin fields south of Rio de Janeiro. The first horizontal production well in Atlanta is expected to start producing in January.

Failure to meet financial commitments related to oil exploration and production concessions can result in the loss of those concessions under Brazilian law.

0leo E Gas Participacoes said on December 24 that it had reached a deal with the majority of holders in a total of $3.8 billion in bonds.

Under that agreement, bondholders will lend between $200 million and $215 million of new capital to keep the company going. In exchange for the loans, bondholders will get 65 percent of the stock in a restructured Oleo and Gas.

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