UPDATE 2-Brazil to sell cash-strapped Petrobras new oil rights
(Recasts to add government spending debate, background, updates share price)
By Leonardo Goy and Marta Nogueira
BRASILIA/RIO DE JANEIRO, June 24 (Reuters) - Brazil plans to sell billions of dollars worth of offshore oil rights to state-run oil company Petrobras, a move expected to saddle the company with new costs even as its debt soars and it struggles to meet existing production targets.
Shares of Petroleo Brasileiro SA, as Petrobras is formally known, fell in Sao Paulo trading on Tuesday. Preferred shares, its most-traded class of stock, slipped 3.9 percent to a nearly three-week low.
Some investors said the move, to sell 5 billion to 9 billion barrels of offshore oil rights to the company, was an attempt to transfer future Petrobras profit to government coffers as an expected bonanza from offshore oil fails to materialize as quickly as hoped.
Under the plan, approved by the country's national energy council on Tuesday, the government will receive 15 billion reais ($6.82 billion) by 2018. Two billion reais are due this year, said Marco Antonio Almeida, secretary of oil and gas at the Mines and Energy Ministry.
"This confirms our worst fears," said analysts at Itau BBA in Sao Paulo, the investment-banking and brokerage arm of Banco Itau-Unibanco Holding SA.
"There is no way for Petrobras to anticipate the production of any of those barrels unless it postpones other projects ... In other words, Petrobras will in fact pay 15 billion (reais) to the government in five years for barrels to be produced in the long term," the analysts wrote in their note.
The government will also get 76.5 percent of all oil produced after development costs are paid, money it will be able to spend or see transferred to local governments with little congressional oversight. Continuación...