Brazil’s BNDES Starts $2.3 Billion Lending to Oil Suppliers
Brazil’s state development bank has approved the first two loans as part of a 4 billion reais ($2.3 billion) program to finance oil equipment and service providers at a time when the country plans to more than double oil production by 2020.
BNDES, as the bank is known, is lending 143 million reais to Grupo Georadar, a company that provides seismic research for oil companies, Ricardo Cunha da Costa, the head of BNDES’ oil and gas supply chain department, said in an interview yesterday. BNDES also agreed on a 13 million-real loan to Ruhrpumpen GmbH, a Witten, German-based maker of industrial pumps that’s building a plant in Brazil to supply the oil industry, he said.
The financing is needed because Brazil requires Petroleo Brasileiro SA (PETR4), the country’s state-controlled oil company, and other oil producers to purchase as much as 70 percent of goods and services from local suppliers as part of a plan to create jobs and boost economic growth. Petrobras is spending more than any other oil company as it develops the largest oil discoveries in the America’s in over three decades.
“Foreign companies would much rather supply from abroad, but this isn’t what the BNDES is interested in,” Costa said at the bank’s headquarters in Rio de Janeiro. “They have to build infrastructure.”
To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net
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