Petrobras, Brazil Still Negotiating Oil Price, May Delay Meeting Tomorrow

Petroleo Brasileiro SA is still negotiating a price for oil reserves that it plans to buy from Brazil’s government in exchange for stock, which may delay approval by a panel of ministers and officials, Energy Minister Marcio Zimmermann said.

Zimmermann said yesterday that Petrobras, as the state- controlled company is known, and the government aimed to reach a price accord by today and seek approval tomorrow from the National Council for Energy Policy, which is made up of nine ministries. It’s unclear if the meeting will still take place as planned, Zimmermann told reporters today in Rio de Janeiro.

Petrobras plans to sell shares next month and use some of the stock to buy as much as 5 billion barrels of offshore oil reserves from the government. Chief Executive Officer Jose Sergio Gabrielli said in March that the offering may include as much as $25 billion in new shares for minority investors.

Haroldo Lima, head of Brazil’s petroleum regulator, said in an Aug. 12 interview that a “reasonable” price would be about $8 a barrel for the undeveloped reserves in deep waters of the Atlantic Ocean. Petrobras is raising cash to develop deepwater oil fields including Tupi, the largest discovery in the Americas since Mexico’s Cantarell in 1976.

Petrobras rose 61 centavos, or 2.4 percent, to 26.06 reais as of 5:08 p.m. in Sao Paulo trading. Yesterday, the stock fell 4.2 percent to the lowest close since March 2009.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at Pmillard1@bloomberg.net

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