Petrobras Debt Risk Up More Than Pemex on Deepwater
This article is for subscribers only.
The cost of protecting against a default by Petroleo Brasileiro SA, the largest oil producer in waters below 1,000 feet, is surging relative to Petroleos Mexicanos on concern that deep-water drilling costs will jump.
Credit default swaps that protect against non-payment by Petrobras, as the Rio de Janeiro-based company is known, over five years cost 187 basis points, or 37 more than its Mexican counterpart, which has no production deeper than 1,000 feet (305 meters), according to prices compiled by CMA DataVision. The gap reached a 17-month high of 47 basis points, or 0.47 percentage point, on June 30, up from 19 on April 20, when BP Plc’s rig explosion in the Gulf of Mexico sent oil spewing into the ocean.