Brazil: Market Maravilhoso!

Oil and Gas Deals Aid Brazil’s Transformation

Discoveries of substantial oil and gas reserves located below 7,000 meters of water, sand, rock and the presalt layer have the potential to transform Brazil into one of the world’s largest oil producers. These reserves were once unreachable, but modern technology, massive investment and Brazilian determination are working to break production barriers. Over the past few years, White & Case closed more than 20 finance transactions in this burgeoning sector, with proceeds exceeding US$15 billion.

Accessing funding is critical to financing Brazilian oil and gas exploration and production and services companies, and in 2011 we saw clients turn to the equity capital markets and project financing arena. White & Case represented Queiroz Galvão Exploração e Produção, the oil and gas exploration and production arm of the Queiroz Galvão (QG) Group, in its US$777.7 million offering of common shares, Brazil’s largest IPO of the year. We also represented the arrangers in two drilling vessel
financings—the US$575 million project financing of the technologically advanced QG Alpha Star offshore oil drillship and the US$850 million project financing of the Floating Production Storage and Offloading (FPSO) vessel OSX-2, the latter named “Latin American Oil & Gas Deal of the Year 2011” by both Project Finance and Project Finance International.

White & Case also advised the arrangers in the largest cross-border high yield issuance of the year in Brazil, the US$2.653 billion inaugural bond offering by OGX Petróleo e Gás Participaçães S.A (OGX), an oil and gas exploration and production company controlled by pioneering Brazilian entrepreneur, Eike Batista, and in the US$700 million project bond issuance by the oil and gas services affiliate of QG. The QG issuance was our third Latin American oil and gas sector project bond in recent years, coming on the heels of the innovative US$1.5 billion Odebrecht Norbe project bond in 2010.