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Brazilian government denies oil giant in financial trouble

(Xinhua)
Updated: 2008-11-28 13:03

RIO DE JANEIRO -- Two Brazilian ministers Thursday rejected sayings that Petrobras, the state-owned oil and gas giant, was in financial trouble and had to borrow big loans from a state-owned bank.

Minister of Mines and Energy Edison Lobao, and Minister of Planning, Budget and Management Paulo Bernardo issued a statement Thursday afternoon, saying the 2-billion-reais ($870 million) loan that Petrobras received from Caixa Economica Federal was just "part of the company's investment plan", which is "quite normal".

"This is not a serious matter for any company. It has been done so many times," said Lobao.

Brazil's presidential chief of staff, Dilma Rousseff, said Petrobras took the loan because it had an "immediate" need for liquidity to pay taxes. She said it was "ridiculous" to say that the company was facing financial hardships.

A member of the Senate economics commission, Tasso Jereissati told a Senate session late Wednesday that the loan of 2 billion reais showed that Petrobras was having liquidity problems.

On Wednesday, the National Monetary Council canceled the loan limit of Petrobras from the domestic market. Petrobras' statement said that the company had always been absorbing financing from international and domestic markets, but it now turned more often to the domestic market due to the current international financial crisis.

Petrobras reported this month that its net income rose 96 percent in the third quarter, reaching a record 10.8 billion reais ($4.6 billion). Its investment is expected to total $60 billion  in 2008.