President Obama from Brazil, “Drill Now!”

Posted on Monday, March 21, 2011 by Post Scripts

by Tina Grazier

It’s an interesting message coming from a President who has blocked drilling in the gulf and concluded that we need high gas prices to get people out of their cars. But it does seem to be the message Obama wishes to convey from Brazil. What’s up? Has he changed his mind? Is he more interested in Brazilian state owned company than he is in American companies?

Petrobras gets permit for U.S. deep waters – UPI

WASHINGTON, March 18 (UPI) — Washington has given Petrobras America Inc. permission to start oil and gas production in the Gulf of Mexico, a regulator said.

The Bureau of Ocean Energy Management, Regulation and Enforcement gave Petrobras approval to use a floating production storage offloading facility at its Cascade-Chinook project in the Gulf of Mexico.


Petrobras is a very big (state owned) Brazilian oil company with holdings in 29 countries including the US. Back in August of 2009 President Obama curiously authorized loans to this state owned oil giant in the amount of $2 billion for exploration of its newly discovered Tupi Oil Field.

Why would one of the biggest big oil giants in the world (state owned) need a fat loan from America for exploration? (And why are oil companies been blocked from exploration in America?)

Coincidentally investor George Soros just happened to reposition his stake in this company to preferred shares just a few days before Obama announced these loans:

His New York-based hedge-fund firm, Soros Fund Management LLC, sold 22 million U.S.-listed common shares of Petrobras, as the Brazilian oil company is known, according to a filing today with the U.S. Securities and Exchange Commission. Soros bought 5.8 million of the company’s U.S.-traded preferred shares.

Soros is taking advantage of the spread between the two types of U.S.-listed Petrobras shares, said Luis Maizel, president of LM Capital Group LLC, which manages about $4 billion. The common shares were 21 percent more expensive than preferred today, according to data compiled by Bloomberg. …

To make things even more interesting, in June of 2010 FOX Nation reported that idled oil rigs in the Gulf of Mexico were being moved to the Tupi fields off the shores of Brazil:

Barack Obama’s oil drilling moratorium will cost tens of thousands of American jobs. But, not everyone will suffer.

Oil companies are planning on moving their rigs from the Gulf of Mexico to South America off the coast of Brazil where the government is more friendly to energy corporations. Reuters reported

I would hope the announcement to allow drilling by Petrobras in the Gulf signals a new Obama policy toward drilling; Americans could sure use the jobs. I fear it’s just another policy to spread the wealth…to Brazil. I wouldn’t so much mind if he were equally friendly and committed to American workers and American energy companies.

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4 Responses to President Obama from Brazil, “Drill Now!”

  1. Chris says:
    Friday, September 2, 2011 at 7:51 pm

    Tina: “Back in August of 2009 President Obama curiously authorized loans to this state owned oil giant in the amount of $2 billion for exploration of its newly discovered Tupi Oil Field.”

    This is a falsehood, one that has been repeated by FOX News, the Wall Street Journal, many right-wing blogs, and most recently by Rick Perry.

    http://www.politifact.com/truth-o-meter/statements/2011/sep/01/rick-perry/rick-perry-says-obama-delivered-2-billion-brazil-h/

    “Perrys claim is wrong in several ways. First, the number is wrong. Although there was an initial commitment for $2 billion, it ultimately became a $308 million loan guarantee. Second, Perry ignores that the Ex-Im Bank is an independent federal agency, and he is wrong to attribute its actions to Obama. The initial commitment came when it was controlled by Bush appointees. And although the Obama appointee voted for the $308 million loan guarantee, there is no evidence that it done at the behest of Obama.

    We rate this statement Pants on Fire.”

  2. Tina says:
    Friday, September 2, 2011 at 9:06 pm

    More politifact fact? Why should I accept their word over the Wall Street Journal? Especially when they admit:

    Although there was an initial commitment for $2 billion…

    Just as the WSJ reported:

    August 18, 2009 WSJ

    http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html

    The U.S. Export-Import Bank tells us it has issued a “preliminary commitment” letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.

    The source used by the WSJ was the US Export-Import bank. That’s the horses mouth, Chris. “Pants on fire” is a little cheesy, not to mention, inaccurate.

    It could be the original deal that the WSJ reported was altered dramatically after reaction from the American people proved to be negative and detrimental to the Presidents image!

    Perry should have researched the story before using it to see if anything had changed since 2009, however, you certainly can’t argue that Obama has had a record of sterling support for the American oil industry and that, in the final analysis is the point.

  3. Chris says:
    Saturday, September 3, 2011 at 2:57 pm

    Tina, you either did not read the entire article or you are ignoring the parts that conflict with your interpretation. Yes, the Export-Import Bank authorized the $2 million. But the bank is NOT controlled by President Obama, and there is no evidence that he had anything to do with this decision. In fact, the initial commitment was made when all members of the Export-Import Bank were Bush appointees.

    The claim that President Obama authorized this remains false. Politifact is correct.

  4. Tina says:
    Saturday, September 3, 2011 at 5:01 pm

    Chris:”and there is no evidence that he had anything to do with this decision.”

    From MercoPress South Atlantic news Agency:

    http://en.mercopress.com/2011/03/21/us-export-import-bank-loans-brazil-3-billion-usd-for-oil-and-world-cup

    In 2009, Petrobras signed a letter of intent with the Ex-Im Bank on a 10 billion USD financing package.

    The U.S. is a key export market for Brazilian crude oil, and output is expected to soar as the pre-salt reserves are developed. Brazil’s vast pre-salt oil and natural-gas reserves lie beneath two kilometers of the Atlantic Ocean and a farther five kilometers below sand, rock and a shifting layer of salt.

    The pre-salt areas are estimated to hold between 50 billion and 100 billion barrels of oil, enough to turn Brazil into one of the world’s top five producers of crude oil.

    The announcement comes a day after the visit of President Obama who confirmed the US wants to become Brazils main trade partner and client of the pre-salt deposits.

    Youll excuse some Americans who resent the President for his punishing policies for US oil production even as he supports and encourages oil exploration in Brazil for import to the US.

    From Bloomberg in July 2009:

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aogq9sBiBhYo

    July 30 (Bloomberg) — Petroleo Brasileiro SA said it may more than double its borrowings from the U.S. Export-Import Bank to as much as $5 billion, following a $10 billion loan from China.

    Petrobras, as the state-controlled oil company is known, may increase the loans from $2 billion now, Chief Financial Officer Almir Barbassa said today at a press conference in Rio de Janeiro. The initial loan made in April was an opening amount, Fred Hochberg, president of the U.S. bank, said earlier today in an interview in Rio.

    Hochberg, in his first trip abroad since being named to the post by President Barack Obama in April, said the administration places a high priority on its relationship with Latin Americas largest economy.

    During his three-day visit to Brazil, Hochberg said he met with officials from Petrobras; Vale SA, the worlds biggest iron-ore producer; and the nuclear power unit of state- controlled Centrais Eletricas Brasileiras SA.

    Energy cooperation with Brazil will be a centerpiece of future bilateral ties, Assistant Secretary of State Thomas Shannon, the top U.S. diplomat for Latin America and Obamas choice to be the next ambassador to Brazil, said in written testimony to the Senate Foreign Relations Committee this month.

    Total new loans by the U.S. Export-Import Bank will likely top $20 billion for the first time in the fiscal year through Sept. 30, Hochberg said, adding that he expects another record next year.

    Chris I stand by my “interpretation” which was:

    It’s an interesting message coming from a President who has blocked drilling in the gulf and concluded that we need high gas prices to get people out of their cars. But it does seem to be the message Obama wishes to convey from Brazil.

    Further evidence of the strangeness of Obamas policies and decisions were reported by FOX as I quoted:

    Barack Obama’s oil drilling moratorium will cost tens of thousands of American jobs. But, not everyone will suffer. Oil companies are planning on moving their rigs from the Gulf of Mexico to South America off the coast of Brazil where the government is more friendly to energy corporations.

    The bank fascilitates trade and diplomatic policies so in that respect the President does have something to do with it. How many jobs did those decisions cost American workers…and why shouldn’t Americans be upset about it?

    As I concluded in my article, “I wouldn’t so much mind if he were equally friendly and committed to American workers and American energy companies.”

    So far he hasn’t been.

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