The U.S. is going to lend billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil's planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.The oil reserves in Brazil's Tupi oil field are likely to make Brazil one of the world's top oil exporters. In the U.S., however, domestic companies are denied access to rich oil reserves in Alaska and off the East and West Coasts. This leaves us all to wonder: why is Obama in favor of drilling off Brazil's coast, but not our own? And if drilling is so wrong, why in the world are we paying for it?
UPDATE: Bloomberg is reporting an interesting link between Obama's Petrobras deal and billionaire George Soros:
His New York-based hedge-fund firm, Soros Fund Management LLC, sold 22 million U.S.-listed common shares of Petrobras, as the Brazilian oil company is known, according to a filing today with the U.S. Securities and Exchange Commission. Soros bought 5.8 million of the company’s U.S.-traded preferred shares.
Soros is taking advantage of the spread between the two types of U.S.-listed Petrobras shares, said Luis Maizel, president of LM Capital Group LLC, which manages about $4 billion. The common shares were 21 percent more expensive than preferred today, according to data compiled by Bloomberg. …
Petrobras preferred shares have also a 10 percent additional dividend, said William Landers, a senior portfolio manager for Latin America at Blackrock Inc.
“Given that there will most likely never be a change in control in the company, I see no reason to pay a higher price for the common shares.” Brazil’s government controls Petrobras and has a majority stake of voting shares.
Hmm. Isn't it a strange coincidence that Obama-supporter Soros would reposition himself within Petrobras to receive dividends just days before Obama's $2 billion in loans and guarantees for the country's offshore drilling operations?