Petrobras Weighs Qatar Stake as Emirate Taps Reserves

Petroleo Brasileiro SA is weighing a proposal by Qatar to take a stake in Brazil’s state-controlled oil producer as it seeks cash to develop offshore fields including the Americas’ largest discovery in three decades.

“Petrobras is a big company and it has a lot of activities, so why not?” Qatari Energy Minister Abdullah bin Hamad al-Attiyah said today in an interview in the Qatari capital, Doha. “Now they will discuss it and evaluate it.”

Qatar, holder of the world’s third-largest natural gas reserves, is deploying cash amassed from higher fuel sales to invest in companies across the globe, including a 17 percent stake in Volkswagen AG’s common shares last year. Petrobras is spending $174.4 billion through 2013 to boost output by more than half and develop offshore fields such as Tupi, the largest discovery in the Western Hemisphere since Mexico’s Cantarell.

“Qatar has been less involved in visible energy sector purchases than other Gulf Co-operation Council countries, so this would be a new adventure,” Rachel Ziemba, a senior analyst at RGE Monitor in New York, which researches sovereign wealth funds, said today in an interview. “This shows a broader trend to looking toward Latin America.”

A Qatari shareholding in Petrobras would be a “good achievement,” al-Attiyah said. It’s “too early” to predict how big a stake Qatar might take in the company, he said.

Lula, Emir Meeting

The energy minister’s comment came after Qatar’s Emir Hamad Bin Khalifa Al-Thani traveled to Brazil and met the country’s President Luiz Inacio Lula da Silva. Today, he is scheduled to travel to Venezuela and meet with President Hugo Chavez.

A Rio de Janeiro-based Petrobras spokeswoman, who can’t be identified by name under company policy, declined to comment.

“Qatar’s emir would be just another investor in Petrobras; the company’s control will continue to be the Brazilian government,” Gilberto Pereira de Souza, a Sao Paulo-based analyst for Banco Espirito Santo, said in an interview.

Petrobras Chief Financial Officer Almir Barbassa said last month the company expects to raise more than $10 billion from minority investors in a share sale it will hold in the first half of this year.

Petrobras fell 2.4 percent in Sao Paulo trading to 34.60 reais at 12:44 p.m. New York time, less than a 2.5 percent decline in the benchmark Bovespa Index. The stock has risen 43 percent in the past 12 months, less than the index’s 72 percent gain.

Petrochemical Projects

Qatar, also the world’s biggest producer and exporter of liquefied natural gas, has a moratorium on new development in its own North Field until 2014 and is using growing gas revenues to invest in energy projects abroad. The country plans to build two petrochemical plants, one in China and the other in Vietnam, with a combined value of $9.8 billion. The country also owns stakes in regasification terminals in the U.S., U.K. and Italy.

The Qatar Investment Authority, the country’s sovereign wealth fund, has about $75 billion worth of investments outside the country, RGE’s Ziemba said. Another investment vehicle for the Qatari government is Qatar Petroleum International, the foreign investment arm of the country’s state energy company.

Petrobras aims to increase total output to 3.7 million barrels a day by 2013, or 52 percent more than the 2.4 million barrels at the end of 2008. By 2020, the company expects to have more than doubled oil production to 5.7 million barrels a day.

Petrobras also is exploring government-owned oil fields as part of an agreement to receive 5 billion barrels of crude in exchange for a bigger government stake in Brazil’s state- controlled oil company.

Pre-Salt Stake

Under proposed changes in Brazil’s oil industry, Petrobras will receive at least a 30 percent stake in all new exploration contracts in the so-called pre-salt region.

The Tupi field lies in the pre-salt area that runs 800 kilometers (500 miles) off Brazil’s coast, holding oil deposits beneath a layer of salt resting as deep as 3,000 meters (9,843 feet) beneath the ocean surface and another 5,000 meters below the seabed.

Qatar, with a population of about 1.5 million people, has the second-highest per capita gross domestic product behind Lichtenstein, according to the U.S. Central Intelligence Agency World Factbook. Its economy is expected to grow 16 percent this year, the country’s emir said Nov. 3, according to state-run Qatar News Agency.