Breakingviews

Rob Cox: When CEOs are worth more as former CEOs

February 5, 2015

Investors this week applauded the abrupt exits of bosses at Ally and Petrobras, whose market value surged by $8 bln. Ousters at McDonald’s recently and Microsoft in 2013 earned similar welcomes. The common thread seems to be relief after a CEO becomes entrenched and inflexible.

Lagging Petrobras won’t win back investors easily

July 25, 2011

For all its promise, Brazil's oil bounty has so far disappointed investors. State-controlled giant Petrobras has massively trailed rivals since the Brazilian government forced it to pay up for offshore oil reserves nearly a year ago.

New Petrobras CEO needs to flex political muscle

February 10, 2012

A 52 pct drop in Q4 profit shows what Maria das Graças Foster is up against. The $200 bln Brazilian energy group’s refining losses, exploration bottlenecks and swollen capex budget are more political than operational problems. Foster’s engineering skills alone won’t solve them.

Petrobras better bond bet than Brasilia

January 20, 2011

With sovereign bond yields so low and inflation flaring up, bond-buying fanciers of this BRIC could be better off lending to its oil-backed corporate proxy.

Petrobras deal fees not as paltry as they appear

September 22, 2010

Brazil's massive sale of about $79 billion of Petrobras stock looks set for a string of financial superlatives. One of them, however, won't be loudly crowed about by investment bankers.

Brazil’s oil windfall raises risk of Dutch disease

September 14, 2010

Petrobras' planned $32 billion capital-raising is just the start of an influx of foreign cash that could over-inflate the Brazilian currency and strangle manufacturers. Soaring oil output will add to the problem. Chilean or Norwegian discipline is needed.

Eike Batista has sweeter barrels than Petrobras

September 10, 2010

Eike Batista may soon be adding billions to his bank balance. Shares of energy group OGX -- the flagship vehicle of Batista, Brazil's richest man -- value its 7 billion-odd shallow water oil reserves at roughly $5 a barrel. That looks a bargain against the $8.51 the government is extracting from Petrobras for deepwater crude. It's no wonder China's Sinopec Group and CNOOC are considering buying into assets owned by the company.

Petrobras samba with government may not be over

September 9, 2010

Brazil's government gouged oil giant Petrobras in its $42 billion transfer of offshore reserves. But at least it seemed to lift some uncertainty. Think again.

Petrobras deal shows it’s more Gazprom than Exxon

September 2, 2010

Petrobras is shaping up more like Gazprom than Exxon Mobil. By overpaying for 5 billion barrels of reserves, the Brazilian state-controlled oil group is transferring up to $17 billion of value to the government, whose stake will also rise. The company is looking more like an instrument of the state than a guardian of shareholder interests.

State meddling warrants bigger Petrobras discount

June 30, 2010

Petrobras has taken a beating of late. But don't blame it all on BP. While the Brazilian energy giant is deep in the deepwater business, its technical prowess at ferreting out hydrocarbons trapped in Davy Jones' Locker is world class. What's questionable is the firm's ability to withstand the Brazilian government's designs to make it an instrument of social policy, as highlighted by its planned massive stock sale and spending program.