expatsp

Petrobras: Buy and Sit Tight Like Soros

Are you aware that the Brazilian government is proposing a new, entirely state-owned company to mange the exploration of these new discoveries? Details are still unclear, but they are potentially pulling the rug out from Petrobras. The reasons are explicitly nationalistic: President Lula has said that the problem with Petrobras is that so much of its profits go to American investors, while "the oil is ours."

Just a potential problem, so far, and the government says that all previous contracts (including with Petrobras) will be respected, but... Petrobras is not Exxon. There are risks to doing the vast majority of your business in a single country with a history of nationalism in relation to petroleum.