It's cellaring season. I can smell the pungent waft of white vinegar from my window. Canadians are pickling, saucing, jamming and chutneying. Some are making wine, too.
And while strictly speaking there's no cellaring season for those of us who buy our cabernets and merlots ready-made and punitively taxed, this is the time of year when stockpiling instincts tend to go into high gear. Liquor stores also ramp up their big-red offerings, making it a good time to hunt for bottles to lay down.
If you've just begun keeping a stash or are considering embarking on that journey, it's good to bear a few hazards in mind. Candid collectors, when they're done boasting about prized trophies, will admit they've committed boners in their buying along the way. I've got my own regrets, which I'm sharing here as part of this wine-cellar confessional. I'm also including tips from bona fide experts: Peter D. Meltzer, New York-based author of Keys to the Cellar: Strategies and Secrets of Wine Collecting, and Tony Aspler, Toronto-based author of Tony Aspler's Cellar Book. Check out their books for extensive information on which styles of wine tend to age gracefully and which don't.
1. Resist hoarding
Don't break the bank today by feverishly scooping up every available bottle of something you've read about or tasted believing it to be the last smart buy on Earth. There'll always be more wine.
2. Don't limit yourself to single-bottle purchases
Previous point notwithstanding, consider buying at least two or three wines of the same kind. When you crack open the first and it delivers bliss, the pleasure will be sweeter knowing you've got more in the basement. Besides, the first will serve as a barometer of how the wine is aging.
3. Make room
If you're building a cellar, think of the capacity, then double it, Mr. Aspler advises. “You'll find that you fill the cellar quickly and wish you had more space.”
4. To thine own tastes e true
Buy wines that reflect your lifestyle, not some critic's scorecard, Mr. Meltzer says. “Try to project the occasions at which your wines will be poured. Extrapolate from your present drinking patterns. Ask yourself how often you entertain, the wines you serve and a typical menu. Break down your purchases accordingly.”
5. Mix it up
“It's possible to have a cellar full of wine yet nothing to drink,” Mr. Meltzer warns. Ideally, you should have a mix of both young wines that need further aging and mature examples that you can consume in the interim.
6. Segregate
“Mark a rack in your cellar for your wife for her book-club nights and your son's rugby party,” Mr. Aspler says. “Otherwise you'll find your first growths missing,” he adds, referring to the top tier of red Bordeaux that cost well into the three digits. Ditto your husband, same-sex partner or daughter, depending on your domestic situation.
7. Be prepared for nevitable letdowns
Trophy hunters never want to admit it, but even the best blue-chip labels can underdeliver 10 or 20 years down the road, either because of poor storage conditions, inherent flaws in the wine or a defective cork. Get set to shed a few tears over the coming years – and always have a backup bottle to crack open.
8. Take regular inventory
Wines can get long in the tooth faster than you anticipate. Make sure you stay on top of your stash.
Mr. Meltzer says one solution is to store wines that are close to maturity in a separate bin or rack for easy access.
9. Wine is for drinking, not idol worship
Don't treat your gems like museum pieces. Mentally expense your wines at the moment of purchase, Mr. Meltzer says.
That way you won't put off opening a precious old bottle until it's too late, waiting for that special occasion that somehow never seems special enough for the wine.
10. Think white
You will inevitably buy too much red wine and not enough age-worthy white, such as German riesling, Australian semillon or fine white Burgundy.
But they can take on glorious nuances and deliver just as much complexity and nirvana as reds – and don't require red meat to make them sing.
11. Beware the shoe closet and furnace room
Store your wines at a constant temperature of 13 C (55 F).
12. Remember the sideways rule
Save your limited horizontal shelving for traditional bottles sealed under cork, which must be kept moist. Screw-cap wines, some of which are good enough to age, can be stored standing up, Mr. Aspler notes.
13. Buy some big bottles
Nothing says fun or conveys generosity at a dinner party like a 1.5-litre magnum or three-litre double-magnum. I wish I had bought more.
14. Beware of older vintages purchased at auction
“Try to determine their provenance and how they were stored,” Mr. Meltzer says. “The level of the wine in the bottle, also known as ‘ullage,' is the barometer of a bottle's condition. Top or upper-shoulder levels are not uncommon for 30-year-old wines but are unusual for a 10- or 20-year-old vintage, where levels should still be into or close to the bottle's neck.
15. Forget not the fizz
“Always keep Champagne on hand,” Mr. Aspler advises, especially vintage-dated bubblies, which can improve nicely with five to 15 years in the cellar. “You'll never know when you'll need to celebrate or commiserate.”
Tuesday, September 21, 2010
Thursday, September 16, 2010
Leadership lessons to live by - Harvey Schachter
Kouzes ... Posner ... Bennis. Three hallowed names in the literature of leadership, and they’re offering new gifts for the fall reading season – simple gifts, in the shape of books with clearly stated ideas, unadorned but punchy, and certainly wise.
James Kouzes and Barry Posner, professors at Santa Clara University in California, write as a team. They are best-known for their 1987 bestseller The Leadership Challenge, which offered a principled and practical view of leadership.
Warren Bennis, a distinguished professor of business administration at the University of California and chairman for the Center for Public Leadership at Harvard University’s Kennedy School, is viewed as the founder of leadership studies. His 1985 book Leaders with Burt Nanus is a talisman for many executives, and he has collaborated on a string of books (my favourites are Organizing Genius, about great groups, and Co-Leaders, about pairs of effective leaders).
Professors Kouzes and Posner are continually asked what is new in leadership ideas. The more they pondered that question, they more they realized that good ideas aren’t new, but have stood the test of time. They describe their new book, The Truth About Leadership, as “a collection of the real thing – no fads, no myths, no trendy responses – just truths that endure.”
They discuss 10 such enduring truths, backed by research they and others have carried out over the years:
You make a difference: Before you can lead, you have to believe you can make a positive impact on others. You have to believe in yourself.
Credibility is the foundation of leadership: As well as believing in yourself, you have to behave in a way that will spur belief in you. “If people don’t believe in you, they won’t willingly follow you,” the authors advise.
Values drive commitment: People want to know what you believe in and you need to know what others treasure if you are going to create the commitment needed to bring everyone together into a powerful force.
Focusing on the future sets leaders apart: Leaders need the capacity to imagine and articulate exciting future possibilities. They need a long-term perspective.
You can’t do it alone: Leadership is a team sport.
Trust is paramount: If you rely on others, you will need their trust. That will only come if you trust them first.
Challenge is the crucible for greatness: Exemplary leaders don’t maintain the status quo, they change it. “Change invariably involves challenge, and challenge tests you. It introduces you to yourself. It brings you face-to-face with your level of commitment, your grittiness, and your values,” they write.
You either lead by example or you don’t lead at all: Leaders must keep their promises, and be role models for the values and actions they espouse.
The best leaders are the best learners: Learning is the master skill of leadership.
Leadership is an affair of the heart: Leaders are in love with their colleagues and their constituents. They make others feel important, and graciously show appreciation. And they love their work, or they wouldn’t be successful at it.
Prof. Bennis’s new book, Still Surprised, is a memoir describing his experiences in the Second World War as a leader of others at age 19; his mentorship by a towering figure in organizational psychology, Douglas MacGregor; the excitement of being at the cusp of the new breakthroughs in social sciences and management in the 1950s and 1960s; his experiences as provost at the State University of New York at Buffalo during the student activism of the 1960s and later as president of the University of Cincinnati; and, most poignantly, his feelings, at age 85, about growing old, as his body (and sometimes mind) fails him, and he experiences the insults of ageism.
The memoir is suffused with insights in leadership, such as how, at both Buffalo and Cincinnati, he learned the dangers of coming on too strong as a newly hired outsider, and the need to master a new culture before trying to change it. Or how he resigned from the helm at Cincinnati after being asked a simple question he couldn’t answer: “Do you love being president of the University of Cincinnati?” The answer turned out to be that he would be happier as a professor than a president.
Whether leadership lessons are learned from Prof. Bennis’s memoir or from the detailed advice from Professors Kouzes and Posner, either book makes for rewarding reading.
James Kouzes and Barry Posner, professors at Santa Clara University in California, write as a team. They are best-known for their 1987 bestseller The Leadership Challenge, which offered a principled and practical view of leadership.
Warren Bennis, a distinguished professor of business administration at the University of California and chairman for the Center for Public Leadership at Harvard University’s Kennedy School, is viewed as the founder of leadership studies. His 1985 book Leaders with Burt Nanus is a talisman for many executives, and he has collaborated on a string of books (my favourites are Organizing Genius, about great groups, and Co-Leaders, about pairs of effective leaders).
Professors Kouzes and Posner are continually asked what is new in leadership ideas. The more they pondered that question, they more they realized that good ideas aren’t new, but have stood the test of time. They describe their new book, The Truth About Leadership, as “a collection of the real thing – no fads, no myths, no trendy responses – just truths that endure.”
They discuss 10 such enduring truths, backed by research they and others have carried out over the years:
You make a difference: Before you can lead, you have to believe you can make a positive impact on others. You have to believe in yourself.
Credibility is the foundation of leadership: As well as believing in yourself, you have to behave in a way that will spur belief in you. “If people don’t believe in you, they won’t willingly follow you,” the authors advise.
Values drive commitment: People want to know what you believe in and you need to know what others treasure if you are going to create the commitment needed to bring everyone together into a powerful force.
Focusing on the future sets leaders apart: Leaders need the capacity to imagine and articulate exciting future possibilities. They need a long-term perspective.
You can’t do it alone: Leadership is a team sport.
Trust is paramount: If you rely on others, you will need their trust. That will only come if you trust them first.
Challenge is the crucible for greatness: Exemplary leaders don’t maintain the status quo, they change it. “Change invariably involves challenge, and challenge tests you. It introduces you to yourself. It brings you face-to-face with your level of commitment, your grittiness, and your values,” they write.
You either lead by example or you don’t lead at all: Leaders must keep their promises, and be role models for the values and actions they espouse.
The best leaders are the best learners: Learning is the master skill of leadership.
Leadership is an affair of the heart: Leaders are in love with their colleagues and their constituents. They make others feel important, and graciously show appreciation. And they love their work, or they wouldn’t be successful at it.
Prof. Bennis’s new book, Still Surprised, is a memoir describing his experiences in the Second World War as a leader of others at age 19; his mentorship by a towering figure in organizational psychology, Douglas MacGregor; the excitement of being at the cusp of the new breakthroughs in social sciences and management in the 1950s and 1960s; his experiences as provost at the State University of New York at Buffalo during the student activism of the 1960s and later as president of the University of Cincinnati; and, most poignantly, his feelings, at age 85, about growing old, as his body (and sometimes mind) fails him, and he experiences the insults of ageism.
The memoir is suffused with insights in leadership, such as how, at both Buffalo and Cincinnati, he learned the dangers of coming on too strong as a newly hired outsider, and the need to master a new culture before trying to change it. Or how he resigned from the helm at Cincinnati after being asked a simple question he couldn’t answer: “Do you love being president of the University of Cincinnati?” The answer turned out to be that he would be happier as a professor than a president.
Whether leadership lessons are learned from Prof. Bennis’s memoir or from the detailed advice from Professors Kouzes and Posner, either book makes for rewarding reading.
Saturday, September 11, 2010
The U.S. Open Costs $236,000 a Day With Mercedes, Nice Seats - By Philip Boroff
Courtside seats at Sunday’s men’s singles final at New York’s U.S. Open go for as much as $5,300 via Ticketexchange, a division of Ticketmaster. (Plus an $800 service charge.)
Women’s final courtside tickets tonight are more widely available, starting at about $700, via Ticketmaster.
Cheapskates endure a love-hate relationship with the Open - - loving the tennis and carping about prices, including $3.75 for a tiny Evian bottle.
Big spenders, though, can get really happy here. A lot of damage can be done in a few hours of conspicuous consumption.
Enticed by a $1,000 discount offered by local Mercedes-Benz dealers, my first stop was the $183,000 silver SLS AMG sports car, on view by the Open’s East gate.
Some 10,000 people have allowed themselves to be photographed with the car at the Open. (The shots are retrieved online, in exchange for providing Mercedes with your e-mail.) With gullwing doors, it has a look James Bond could love.
A few paces away, a volunteer from the United States Tennis Association detailed the terms of Open immortality. He pointed to tiles on the ground of the plaza with names of donors to “USTA Serves.” It provides scholarships to middle school and high school students, among other deeds.
The top tiles, 16-inch squares of white bronze, go for $25,000. Audio equipment mogul Sidney Harman, the new owner of Newsweek, sprung for one with his wife, Jane, a California congresswoman.
Dress Like Roger
While duplicating Roger Federer’s forehand is impossible, replicating his outfit is easier.
Nike’s outpost sells Federer’s collared shirts and shorts, which end just above the knees; plus sneakers artfully depicting New York’s skyline over the heel. Rafael Nadal’s uniform is more informal, with shorts below the knees and neon sneakers.
The two getups run a total of just over $600.
As an investment, player autographs can be dubious. Federer, for one, patiently dilutes the market when encountering fans outside Ashe Stadium. Mementos do evoke our shared history. The Ace Authentic Collectibles kiosk has them in abundance.
For the budget-minded, there are tennis trading cards, modeled after baseballs cards. Four cards per $3 pack -- with surprise autographs and bits of player clothing.
Then there’s a wall mounting of champions Rod Laver, Pete Sampras, Federer and Bjorn Borg, including a picture of them taken last year at Wimbledon clutching a trophy, with balls autographed by each. It goes for about $1,200.
Ashe Endowment
The Arthur Ashe Endowment for the Defeat of AIDS is auctioning a jumbo tennis ball, signed by Federer and others, which as of Wednesday required a minimum bid of $600. Among other tasks, the endowment annually brings eight doctors to New York who do AIDS work in their home countries, training them in the latest clinical techniques. It was started in 1995, two years after Ashe died of pneumonia, a complication of AIDS.
“AIDS doesn’t have the same consciousness and urgency in this country that it once had,” said Leslie Allen, a former world No. 18 singles player who manages the booth.
For nourishment, I sampled Aces Restaurant on the “club” level of Ashe Stadium, adjacent to suites that accommodate 20 people and that the Open sold for $10,000 to $65,000 a session. I sustained myself with a $12 heirloom tomato salad and $28 Scottish salmon. Monitors at the bar showed live tennis on center court without commercials.
Silk Rug
The last stop was the Silver Tennis Collection shop on the club level, next to Aces. A rare 1998 Jack Kramer Autograph graphite racket costs $6,000; a silk tennis-themed rug was tagged at $15,000 and there’s tennis jewelry. One-third of proceeds go to USTA Serves.
After spending a theoretical $236,000 on my spree -- skimming the surface of goods advertised and sold at the Open -- I bought a salmon-and-blue striped tie, embossed with gold, wood rackets.
It cost $65.
Women’s final courtside tickets tonight are more widely available, starting at about $700, via Ticketmaster.
Cheapskates endure a love-hate relationship with the Open - - loving the tennis and carping about prices, including $3.75 for a tiny Evian bottle.
Big spenders, though, can get really happy here. A lot of damage can be done in a few hours of conspicuous consumption.
Enticed by a $1,000 discount offered by local Mercedes-Benz dealers, my first stop was the $183,000 silver SLS AMG sports car, on view by the Open’s East gate.
Some 10,000 people have allowed themselves to be photographed with the car at the Open. (The shots are retrieved online, in exchange for providing Mercedes with your e-mail.) With gullwing doors, it has a look James Bond could love.
A few paces away, a volunteer from the United States Tennis Association detailed the terms of Open immortality. He pointed to tiles on the ground of the plaza with names of donors to “USTA Serves.” It provides scholarships to middle school and high school students, among other deeds.
The top tiles, 16-inch squares of white bronze, go for $25,000. Audio equipment mogul Sidney Harman, the new owner of Newsweek, sprung for one with his wife, Jane, a California congresswoman.
Dress Like Roger
While duplicating Roger Federer’s forehand is impossible, replicating his outfit is easier.
Nike’s outpost sells Federer’s collared shirts and shorts, which end just above the knees; plus sneakers artfully depicting New York’s skyline over the heel. Rafael Nadal’s uniform is more informal, with shorts below the knees and neon sneakers.
The two getups run a total of just over $600.
As an investment, player autographs can be dubious. Federer, for one, patiently dilutes the market when encountering fans outside Ashe Stadium. Mementos do evoke our shared history. The Ace Authentic Collectibles kiosk has them in abundance.
For the budget-minded, there are tennis trading cards, modeled after baseballs cards. Four cards per $3 pack -- with surprise autographs and bits of player clothing.
Then there’s a wall mounting of champions Rod Laver, Pete Sampras, Federer and Bjorn Borg, including a picture of them taken last year at Wimbledon clutching a trophy, with balls autographed by each. It goes for about $1,200.
Ashe Endowment
The Arthur Ashe Endowment for the Defeat of AIDS is auctioning a jumbo tennis ball, signed by Federer and others, which as of Wednesday required a minimum bid of $600. Among other tasks, the endowment annually brings eight doctors to New York who do AIDS work in their home countries, training them in the latest clinical techniques. It was started in 1995, two years after Ashe died of pneumonia, a complication of AIDS.
“AIDS doesn’t have the same consciousness and urgency in this country that it once had,” said Leslie Allen, a former world No. 18 singles player who manages the booth.
For nourishment, I sampled Aces Restaurant on the “club” level of Ashe Stadium, adjacent to suites that accommodate 20 people and that the Open sold for $10,000 to $65,000 a session. I sustained myself with a $12 heirloom tomato salad and $28 Scottish salmon. Monitors at the bar showed live tennis on center court without commercials.
Silk Rug
The last stop was the Silver Tennis Collection shop on the club level, next to Aces. A rare 1998 Jack Kramer Autograph graphite racket costs $6,000; a silk tennis-themed rug was tagged at $15,000 and there’s tennis jewelry. One-third of proceeds go to USTA Serves.
After spending a theoretical $236,000 on my spree -- skimming the surface of goods advertised and sold at the Open -- I bought a salmon-and-blue striped tie, embossed with gold, wood rackets.
It cost $65.
Wednesday, September 1, 2010
Petrobras to Buy Oil From Brazil for $42.5 Billion in Stock - By Peter Millard, Maria Luiza Rabello and Katia Cortes
Petroleo Brasileiro SA, Latin America’s largest company by market value, agreed to pay the Brazilian government $42.5 billion in new stock for the right to develop 5 billion barrels of offshore oil reserves.
Petrobras, as the state-run company is known, will pay an average of $8.51 a barrel for the oil after almost two weeks of negotiations with the government, according to a regulatory filing yesterday. More than half the oil will come from the Franco field in the offshore Santos Basin, the company said.
The value set for the reserves will determine how much new stock Petrobras must offer minority investors in a related public offering to raise funds for a $224 billion plan to develop offshore fields and boost refinery capacity. Petrobras has plunged 26 percent in Sao Paulo this year on concern it would pay more for the oil than it’s worth, diluting earnings.
The price is “certainly at the high end” of what investors and analysts were expecting, said Gianna Bern, president of Brookshire Advisory & Research Inc., based near Chicago. “Market conditions right now are less than desirable, but Petrobras has a good long-term growth story.”
The price is more than the $7.50 per barrel estimated by UBS AG analyst Lilyanna Yang and Ted Harper, who help manage about $6.8 billion at Frost Investment Advisors in Houston. A price of $7.50 a barrel or higher would force Petrobras to sell more shares to the government than investors expect and dilute earnings, Yang said in an Aug. 11 report.
High Price
Haroldo Lima, head of the Brazilian oil regulator, known as the ANP, said in an Aug. 12 interview that $8 a barrel would be a “reasonable price” for the reserves.
About 3.1 billion barrels of the reserves will come from Franco, Petrobras said in yesterday’s statement, while the Iara and Florim fields will account for another 1.07 billion. Petrobras, based in Rio de Janeiro, will also receive the rights to oil at Tupi Northeast and Sul and Guara East fields.
“This is the biggest operation ever done of its kind,” Finance Minister Guido Mantega said in Brasilia yesterday.
Billionaire George Soros’s Soros Fund Management LLC, which oversees $25 billion, sold its Petrobras stock in the second quarter, dumping its biggest company holding. BlackRock Inc., the world’s biggest asset manager, and Banco BTG Pactual SA also sold Petrobras in the quarter, according to Bloomberg data.
Petrobras rose 97 centavos, or 3.7 percent, to 27.03 reais in Sao Paulo trading yesterday. The yield on the company’s $2.5 billion in 5.75 percent bonds due 2020 fell to the lowest since Aug. 26, declining to 4.828 percent yesterday from 4.942 percent, according to BNP Paribas SA prices on Bloomberg.
Maintaining Stakes
Petrobras, which aims to carry out the share sale by the end of this month, said in the regulatory filing it expects to disclose the terms of the offer on Sept. 3. The company plans to issue enough shares to allow the government and minority investors to maintain their stakes. The sale was delayed in June as the company and the government awaited independent assessments on the value of the reserves.
Mantega and Petrobras Chief Executive Officer Jose Sergio Gabrielli yesterday declined to comment on the total value of the share sale.
The oil-for-stock swap is part of new regulations from President Luiz Inacio Lula da Silva late last year to increase government control over reserves after Petrobras discovered the Tupi field, the largest oil find since Mexico’s Cantarell in 1976. Lula received two separate independent valuations on the crude reserves on Aug. 19 from Petrobras and the ANP. The ANP, government and company began negotiations on Aug. 20.
Lula is ’’happy’’ with the price, according to Mantega.
‘Commercial Transaction’
Petrobras said last month it was treating the price talks as a “commercial transaction” and that “it’s natural that both parties would seek to maximize their results.”
Petrobras in June named Banco Bradesco SA, Citigroup Inc., Itau Unibanco Holding SA, Bank of America Corp., Morgan Stanley and Banco Santander SA to manage the share sale and that Banco do Brasil SA will manage the offering to minority investors in the domestic market.
Chief Financial Officer Almir Barbassa said Aug. 13 that the share sale is needed to replenish capital after debt rose to the upper limit of the company’s target. Debt as a percentage of equity rose to 34 percent in the second quarter, from 32 percent in the previous quarter and 28 percent in the year-earlier period, Petrobras said in its earnings report.
Petrobras, as the state-run company is known, will pay an average of $8.51 a barrel for the oil after almost two weeks of negotiations with the government, according to a regulatory filing yesterday. More than half the oil will come from the Franco field in the offshore Santos Basin, the company said.
The value set for the reserves will determine how much new stock Petrobras must offer minority investors in a related public offering to raise funds for a $224 billion plan to develop offshore fields and boost refinery capacity. Petrobras has plunged 26 percent in Sao Paulo this year on concern it would pay more for the oil than it’s worth, diluting earnings.
The price is “certainly at the high end” of what investors and analysts were expecting, said Gianna Bern, president of Brookshire Advisory & Research Inc., based near Chicago. “Market conditions right now are less than desirable, but Petrobras has a good long-term growth story.”
The price is more than the $7.50 per barrel estimated by UBS AG analyst Lilyanna Yang and Ted Harper, who help manage about $6.8 billion at Frost Investment Advisors in Houston. A price of $7.50 a barrel or higher would force Petrobras to sell more shares to the government than investors expect and dilute earnings, Yang said in an Aug. 11 report.
High Price
Haroldo Lima, head of the Brazilian oil regulator, known as the ANP, said in an Aug. 12 interview that $8 a barrel would be a “reasonable price” for the reserves.
About 3.1 billion barrels of the reserves will come from Franco, Petrobras said in yesterday’s statement, while the Iara and Florim fields will account for another 1.07 billion. Petrobras, based in Rio de Janeiro, will also receive the rights to oil at Tupi Northeast and Sul and Guara East fields.
“This is the biggest operation ever done of its kind,” Finance Minister Guido Mantega said in Brasilia yesterday.
Billionaire George Soros’s Soros Fund Management LLC, which oversees $25 billion, sold its Petrobras stock in the second quarter, dumping its biggest company holding. BlackRock Inc., the world’s biggest asset manager, and Banco BTG Pactual SA also sold Petrobras in the quarter, according to Bloomberg data.
Petrobras rose 97 centavos, or 3.7 percent, to 27.03 reais in Sao Paulo trading yesterday. The yield on the company’s $2.5 billion in 5.75 percent bonds due 2020 fell to the lowest since Aug. 26, declining to 4.828 percent yesterday from 4.942 percent, according to BNP Paribas SA prices on Bloomberg.
Maintaining Stakes
Petrobras, which aims to carry out the share sale by the end of this month, said in the regulatory filing it expects to disclose the terms of the offer on Sept. 3. The company plans to issue enough shares to allow the government and minority investors to maintain their stakes. The sale was delayed in June as the company and the government awaited independent assessments on the value of the reserves.
Mantega and Petrobras Chief Executive Officer Jose Sergio Gabrielli yesterday declined to comment on the total value of the share sale.
The oil-for-stock swap is part of new regulations from President Luiz Inacio Lula da Silva late last year to increase government control over reserves after Petrobras discovered the Tupi field, the largest oil find since Mexico’s Cantarell in 1976. Lula received two separate independent valuations on the crude reserves on Aug. 19 from Petrobras and the ANP. The ANP, government and company began negotiations on Aug. 20.
Lula is ’’happy’’ with the price, according to Mantega.
‘Commercial Transaction’
Petrobras said last month it was treating the price talks as a “commercial transaction” and that “it’s natural that both parties would seek to maximize their results.”
Petrobras in June named Banco Bradesco SA, Citigroup Inc., Itau Unibanco Holding SA, Bank of America Corp., Morgan Stanley and Banco Santander SA to manage the share sale and that Banco do Brasil SA will manage the offering to minority investors in the domestic market.
Chief Financial Officer Almir Barbassa said Aug. 13 that the share sale is needed to replenish capital after debt rose to the upper limit of the company’s target. Debt as a percentage of equity rose to 34 percent in the second quarter, from 32 percent in the previous quarter and 28 percent in the year-earlier period, Petrobras said in its earnings report.
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