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PBR » Topics » We are subject to substantial risks relating to our international operations, in particular in Latin America and the Middle East.This excerpt taken from the PBR 20-F filed May 22, 2009. We are subject
to substantial risks relating to our international operations,
in particular in Latin America, West Africa and the Middle
East.
We operate in a number of different countries, particularly in
Latin America, West Africa and the Middle East, that can be
politically, economically and socially unstable. The results of
operations and financial condition of our
Table of Contents
subsidiaries in these countries may be adversely affected by
fluctuations in their local economies, political instability and
governmental actions relating to the economy, including:
If one or more of the risks described above were to materialize
we may lose part or all of our reserves in the affected country
and we may not achieve our strategic objectives in these
countries or in our international operations as a whole, which
may result in a material adverse effect on our results of
operations and financial condition.
Of the countries outside of Brazil in which we operate,
Argentina is the most significant, representing 44.65% of our
total international crude oil and natural gas production and
31.71% of our international proved crude oil and natural gas
reserves as of December 31, 2008. The Argentine government
has established export tax rates for crude oil, natural gas and
oil products that have negatively affected our results of
operations and financial condition. We also have significant
operations in Bolivia and Venezuela that represented,
respectively, 24.32% and 6.29% of our total international
production in barrels of oil equivalent at December 31,
2008. Bolivia accounted for 31.02% of our international proved
crude oil and natural gas reserves at December 31, 2008.
On
January 25, 2009, Bolivia adopted a new constitution that
prohibits private ownership of the country’s oil and gas
resources. In light of the new constitution, we may be required
to write off some or all of our proved reserves in Bolivia at
the end of 2009. For more information about our operations
outside Brazil, see Item 4, “Information on the
Company—International.”
This excerpt taken from the PBR 20-F filed Jun 30, 2005. We are subject to substantial risks relating to our international operations, in particular in Latin America and the Middle East.
We operate in a number of different countries, particularly in Latin America and the Middle East that can be politically, economically and socially unstable. The results of operations and financial condition of our subsidiaries in these countries may be adversely affected by fluctuations in their local economies, political instability and governmental actions relating to the economy, including:
If one or more of the risks described above were to materialize we may not achieve our strategic objectives in these countries or in our international operations as a whole, resulting in a material adverse effect on our results of operations and financial condition.
Of the countries in which we operate, our operations in Argentina are the most significant, representing approximately 5.6% of our total crude oil and natural gas production and 3.3% of our proved crude oil and natural gas reserves at December 31, 2004. In response to the Argentine crisis, the Argentine government has made a number of changes in the regulatory structure, including increasing government control over the price structure of many industries, such as the oil and gas sector. In addition, our operations in Bolivia represented approximately 2.3% of our total production in barrels of oil equivalent and 2.8% of our proved crude oil and natural gas reserves at December 31, 2004. Recent political unrest in Bolivia has targeted foreign companies’ participation in Bolivia’s natural gas industry, which resulted in a significant increase in royalties and taxes in May 2005 and calls by some groups for nationalization of the energy industry. Protests by opposition groups eventually led to the resignation of President Carlos Mesa in June 2005, after a mere 19 months in office. The Bolivian political, economic and social situation, generally, and the country’s energy policy, in particular, remains extremely volatile and unpredictable. Future policy decisions in Argentina and Bolivia may adversely affect our investments in each country. A deterioration in the situation of Argentina and Bolivia may have a material adverse effect on our results of operation and financial condition.
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