The record $70bn fundraising by Brazil's Petrobras to fund development of the Santos basin will have a knock-on effect on other companies in the area, say analysts, probably for the better.
Keith Morris at Evolution Securities said:
The sale could be construed as a mixed blessing for other shares such as BG, Repsol-YPF and GALP as the share sale sees the Brazilian government increasing its stake in Petrobras and increases concerns that it will interfere in the sequence of field developments.
This concern has been overhanging BG (among other worries). On the positive side Petrobras now has the funds to move ahead with its massive capex programme and the appetite for the offering bodes well for Repsol-YPF's proposed IPO of its Brazilian business.
On balance we believe Petrobras' funding resolution is good news for the all participants including Wellstream for whom Petrobras is the major client. We don't believe BG's fields are likely to be pushed back and indeed the first oil from the Tupi field is due later this year. Similarly, the rehabilitation of Repsol-YPF's business is dependent on its Brazilian IPO and Petrobras has shown the way.
BG shares have climbed 9p to £11.46 so far today while Wellstream - which this week revealed a number of bid approaches - has slipped 1p to 775p.
