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Trifles light as air

Petrobras (PBR): And now they begin to believe me

On September 7th 2008, Petrobras stood at U$44.44 a share and your humble correspondent wrote this article called “Petrobras: Great for Brazil, not so great for shareholders that finished up with this conclusion:

“It’s at this point the plain, boring, simple fact that Petrobras is a state run company needs emphasizing. Bottom line results are not the be-all-and-end-all of PBR’s corporate philosophy. Never have been and never will be. Do you honestly believe that the company will continue to pay enormous dividends to foreign shareholders while at the same time taking out massive debt lines to pay for the capex? If so, you are in for a rude awakening.

“So I’m still neutral on Petrobras stock. I’m reasonably bullish on the company and what it will do for Brazil in the long term future, but because shareholders are not the raison d’etre of PBR there’s no reason why you or I should prefer it over CVX, COP, XOM or whatever other big oil strikes your fancy.”

Cut to August 31st 2009, a share price 10% lower than a year ago at U$39.64, and the latest news from PBR.

Aug. 31 (Bloomberg) — Brazilian President Luiz Inacio Lula da Silva unveiled a plan to increase state control of the oil industry, proposing regulations to help the country become one of the world’s 10 largest oil-producing nations.

………………..

Petrobras common shares tumbled the most in six months as the company said it may sell new stock to help finance its exploration. The plan raised concern among some investors that the government is seeking to increase its stake at the expense of minority shareholders.

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