RIO DE JANEIRO, July 16 - Brazil's state-run oil company Petrobras expects new local private investment funds to provide at least $5.2 billion to capitalize service companies, crucial for a push to develop massive offshore reserves.
Brazil is hoping to spur job creation at home with the construction of equipment such as drilling rigs and offshore platforms as part of the development of deepwater sub-salt oil fields that could make the country a major oil exporter.
Relying on domestic industry could help keep the economy churning amid the financial crisis but risks leaving Petrobras (PETR4.SA)(PBR.N) without the equipment it needs or delaying the technically challenging offshore oil production.
"By the end of the year we should have 14 or 15 (funds), with total assets of 10 billion reais ($5.2 billion) to help with the expansion of local industry," Petrobras business advisor Marcilio Miranda told reporters.
"If that doesn't happen the foreign companies will come here, and the local business will disappear," he said, speaking on the sidelines of a conference on private equity and venture capital in Brazil's energy sector.
Miranda said investors are preparing to register funds via entities often used for private equity that will let medium-sized companies capitalize operations without taking on crippling debt loads or locking up assets in loan guarantees.
Petrobras wants local businesses to build 28 rigs and six floating production storage and offload (FPSO) terminals as part of a broad plan to invest some $174 billion by 2013 to develop the offshore reserves.
"We have to create operations that don't generate debt on the company balance sheets, because they end up with limited production capacity. That's the logic of the funds," he said.
"We can't rely on credit lines, because there is not enough credit to finance the Petrobras business plan," he said.
The company plans to make its own investment in a fund focused on small-scale service companies with a modest 10 million reais, Miranda said, though this figure could rise depending on demand.
Miranda said due to securities regulations he could not identify which investors would provide the capital.
Brazil's Modal Bank is preparing to register an oil and gas fund that hopes to open with a capitalization of around 500 million reais ($260 million) that would focus on refineries, pipelines and transportation, said a bank official at the conference.
State development bank BNDES, which has already set aside some $13 billion to finance Petrobras' development plan, also plans to invest up to 20 percent in an oil sector fund, according to BNDES Fund Investment Chief Eduardo Sa.
"We want to be in the game as well," Sa said.
($1 = 1.93 reais)
Brazil is hoping to spur job creation at home with the construction of equipment such as drilling rigs and offshore platforms as part of the development of deepwater sub-salt oil fields that could make the country a major oil exporter.
Relying on domestic industry could help keep the economy churning amid the financial crisis but risks leaving Petrobras (PETR4.SA)(PBR.N) without the equipment it needs or delaying the technically challenging offshore oil production.
"By the end of the year we should have 14 or 15 (funds), with total assets of 10 billion reais ($5.2 billion) to help with the expansion of local industry," Petrobras business advisor Marcilio Miranda told reporters.
"If that doesn't happen the foreign companies will come here, and the local business will disappear," he said, speaking on the sidelines of a conference on private equity and venture capital in Brazil's energy sector.
Miranda said investors are preparing to register funds via entities often used for private equity that will let medium-sized companies capitalize operations without taking on crippling debt loads or locking up assets in loan guarantees.
Petrobras wants local businesses to build 28 rigs and six floating production storage and offload (FPSO) terminals as part of a broad plan to invest some $174 billion by 2013 to develop the offshore reserves.
"We have to create operations that don't generate debt on the company balance sheets, because they end up with limited production capacity. That's the logic of the funds," he said.
"We can't rely on credit lines, because there is not enough credit to finance the Petrobras business plan," he said.
The company plans to make its own investment in a fund focused on small-scale service companies with a modest 10 million reais, Miranda said, though this figure could rise depending on demand.
Miranda said due to securities regulations he could not identify which investors would provide the capital.
Brazil's Modal Bank is preparing to register an oil and gas fund that hopes to open with a capitalization of around 500 million reais ($260 million) that would focus on refineries, pipelines and transportation, said a bank official at the conference.
State development bank BNDES, which has already set aside some $13 billion to finance Petrobras' development plan, also plans to invest up to 20 percent in an oil sector fund, according to BNDES Fund Investment Chief Eduardo Sa.
"We want to be in the game as well," Sa said.
($1 = 1.93 reais)
