Brazil Oil Week

Brazil Needs Billions to Drill Really Deep

Newsweek

August, 29th

By Mac Margolis

Brazil has a sunken-treasure problem. The discovery three years ago of a huge offshore stash of oil unleashed a gusher of nationalist euphoria. At somewhere between 9 billion and 15 billion barrels, it was the largest find in the Western Hemisphere in more than a quarter century. President Luiz Inácio Lula da Silva hailed the find as a ticket to Brazil’s “second independence,” and called on the country’s legislators to tighten state control over the oil industry.

Since then, things have become more difficult. Brazil’s treasure lies deeper (4.5 miles) and farther from shore (200 miles) than any oil being commercially exploited today. To tap that undersea wealth, state oil company Petrobras says it needs cash up front: some $224 billion over the next five years. It has planned a massive stock offering for September. Problem is, the complicated financial transaction will only add to Petrobras’s already heavy debt load (34 percent of net assets), which could move ratings firms to downgrade the company. That would drive up borrowing costs and sour the deal. Brazil could share the burden by calling on international oil majors as risk investors, but that would mean easing its grip on the industry. In the run-up to the Oct. 3 presidential elections, that’s not happening.
 
Word List
Hail - greet, signal, adress, acclaim
Deep - profound, penetrating, submerged
Far - at a distance, extremely
Downgrade - to lower, to degrade (antonym - improve, upgrade_
Borrowing costs - the cost of mony taken from a bank or financial institution
Grip - hold, embrace, to have perception of, to control

Tradutor

 - Leiam e discutam as perguntas abaixo (postem suas ideias e respostas, clicando em "COMENTÁRIOS"):

1. What is Brazil's sunken problem?
2. Why is the new finding complicated?
3. How much cash does Petrobras need?
4. What is Petrobras' plan to get the cash?
5. What is wrong with the plan?