UPDATE 2-Brazil to sell cash-strapped Petrobras new oil rights

(Recasts to supplement supervision spending debate, background, updates
share price)

By Leonardo Goy and Marta Nogueira

BRASILIA/RIO DE JANEIRO, Jun 24 (Reuters) – Brazil skeleton to
sell billions of dollars value of offshore oil rights to
state-run oil association Petrobras, a pierce approaching to saddle the
company with new costs even as a debt soars and it struggles
to accommodate existent prolongation targets.

Shares of Petroleo Brasileiro SA, as Petrobras is
formally known, fell in Sao Paulo trade on Tuesday. Preferred
shares, a most-traded category of stock, slipped 3.9 percent to a
nearly three-week low.

Some investors pronounced a move, to sell 5 billion to 9 billion
barrels of offshore oil rights to a company, was an try to
transfer destiny Petrobras distinction to supervision coffers as an
expected excavation from offshore oil fails to manifest as
quickly as hoped.

Under a plan, authorized by a country’s inhabitant energy
council on Tuesday, a supervision will accept 15 billion reais
($6.82 billion) by 2018. Two billion reais are due this year,
said Marco Antonio Almeida, secretary of oil and gas during the
Mines and Energy Ministry.

“This confirms a misfortune fears,” pronounced analysts during Itau BBA
in Sao Paulo, a investment-banking and brokerage arm of Banco
Itau-Unibanco Holding SA.

“There is no approach for Petrobras to expect a production
of any of those barrels unless it postpones other projects …
In other words, Petrobras will in fact compensate 15 billion (reais) to
the supervision in 5 years for barrels to be constructed in the
long term,” a analysts wrote in their note.

The supervision will also get 76.5 percent of all oil
produced after growth costs are paid, income it will be able
to spend or see eliminated to internal governments with little
congressional oversight.

Brazilian President Dilma Rousseff, who betrothed billions of
dollars in oil income from offshore fields when she ran for and
won her initial tenure in 2010, has been slipping in a polls ahead
of an Oct election.

Despite about $200 billion of Petrobras investment since
then, small of a approaching new income has materialized and
stagnant prolongation has done Petrobras a world’s most-indebted
and least-profitable vital oil company.

As Brazil’s economy has slowed, celebration loyalists including
former President Luiz Inacio Lula da Silva have called on
Rousseff to boost spending to win behind support.

Petrobras will buy a rights in areas where it bought 5
billion barrels of still unproduced oil from a supervision in
2010 for $43.5 billion of Petrobras stock. Those areas are
believed to reason some-more oil than initial expected, yet there is
no certainty any of a oil will ever be constructed from the
high-risk, high-cost, deepwater oil areas.

Petrobras Chief Executive Maria das Gracas Foster pronounced later
on Tuesday that a government’s devise to sell new oil rights “is
an glorious opportunity” for a company.

Foster pronounced Petrobras will boost destiny collateral spending
plans by 3 percent above a $221 billion 2014-2017 devise and
build 9 new offshore oil platforms to boost outlay under
the new deal.

($1 = 2.22 Brazilian reais)

(Additional stating by Rodrigo Viga Gaier; Writing by Jeb
Blount and Reese Ewing; Editing by Jeffrey Benkoe, Marguerita
Choy and Ken Wills)

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