Brazil may contribute up to $53B to Petrobras

The Brazilian federal government may pump up to 100 billion real ($53 billion) into the state-run oil company Petrobras to bolster the company’s exploration strength, a business newspaper reported Thursday.

According to Valor Economico, the move would increase the government’s stake in the company to between 65 percent and 70 percent, from its current 56 percent interest, should minority shareholders not subscribe to the issuance. The report said the lowest amount of capital injected would be around 40 billion real ($21.22 billion).

Raymond James analyst Ricardo Cavanagh said he expects the Brazilian government to maintain a pro-market approach, “seeking to combine sovereign and private interest.”

The article said the government would issue securities to raise the capital and would seek to provide Petrobras a leading role as sole operator of the new offshore pre-salt oil fields.

Shares of the company fell 68 cents to $42 in afternoon trading.