Brazil at risk of becoming one big Petrobras

Kenneth Rapoza – Forbes, 02/22/2012

Petrobras off shore platform in the South Atlantic. Most of the foreign direct investment in Brazil is going to this company, its subsidiaries, or the oil and gas fields it's discovered off the coast of Rio and Sampa. (Wikimedia)

It’s probably not the biggest risk Brazil faces, but it is worth noting that the one true magnet that’s attracting all of that foreign capital flowing into Brazil is due to just one company: oil and gas rich Petrobras (PBR).

Brazil’s foreign investments, in fact, are rather dependent on it. Without Petrobras and its massive deep ocean oil discoveries off the coast of São Paulo and Rio de Janeiro states, international inflows into Brazil would look tame. Very tame, in fact.

Foreign investment in Brazil surprised everyone in December 2011. It hit a monthly record of $15.4 billion, 300% more than what a Bloomberg survey of 11 analysts had forecast at the time.

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