Petrobras 2nd-Worst Oil Stock as Politics Hurt Offer
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Petroleo Brasileiro SA is the world’s second-worst performing oil company this year, behind only BP Plc, on concern Brazil’s government will force the producer to pay more than investors originally expected for crude reserves.
The value of the 5 billion barrels of reserves, which the government plans to swap for new stock, will determine the size of the state-run company’s planned share sale this year and may signal the extent to which President Luiz Inacio Lula da Silva’s administration can increase control. A higher price may force Petrobras to sell more shares to pay for the oil, diluting minority shareholders, said Max Bueno, an analyst with brokerage Spinelli Corretora.