Just when you thought that President Obama could not do anything worse than what he is already doing, he keeps surprising us! Does anyone remember during the campaign he was saying that drilling for oil was not a good idea and he was against it? Well, he seems to be changing his tune now. According to the Wall Street Journal:
The U.S. is going to lend billions of dollars to Brazil’s state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil’s planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.
The U.S. Export-Import Bank tells us it has issued a “preliminary commitment” letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.
But look on the bright side. If President Obama has embraced offshore drilling in Brazil, why not in the old U.S.A.? The land of the sorta free and the home of the heavily indebted has enormous offshore oil deposits, and last year ahead of the November elections, with gasoline at $4 a gallon, Congress let a ban on offshore drilling expire.
One would think that there would have to be a reason for this right? Well, a coulple of days before that was announced, it was reported that George Sorros had invested $2 billion to fund this offshore drilling venture! From Bloomberg:
Billionaire George Soros cut his stake in his biggest holding, Petroleo Brasileiro SA, in the second quarter while buying more shares of other energy producers.
His New York-based hedge-fund firm, Soros Fund Management LLC, sold 22 million U.S.-listed common shares of Petrobras, as the Brazilian oil company is known, according to a filing today with the U.S. Securities and Exchange Commission. Soros bought 5.8 million of the company’s U.S.-traded preferred shares.
Soros is taking advantage of the spread between the two types of U.S.-listed Petrobras shares, said Luis Maizel, president of LM Capital Group LLC, which manages about $4 billion. The common shares were 21 percent more expensive than preferred today, according to data compiled by Bloomberg.
“He knows he held a voting right in the common shares that would never translate to actual power,” Maizel said in an interview from San Francisco. “He’s just playing the spread.”
Petrobras preferred shares have also a 10 percent additional dividend, saidWilliam Landers, a senior portfolio manager for Latin America at Blackrock Inc.
“Given that there will most likely never be a change in control in the company, I see no reason to pay a higher price for the common shares.” Brazil’s government controls Petrobras and has a majority stake of voting shares.
Soros boosted his stake in oil company Hess Corp. to 5.1 million shares as of June 30 from 3.7 million at the end of the first quarter, according to the filing. Hess was Soros’s second- largest holding. He also added to stakes in Houston-based Plains Exploration & Production Co. and bought shares in Calgary-based Suncor Energy Inc. and InterOil Corp. in Sydney.
Soros’s company oversees about $24 billion. His Quantum Endowment Fundreturned 9.3 percent in the second quarter. Hedge funds gained an average of 9.1 percent during the period, according to data compiled by Hedge Fund Research Inc. in Chicago. The filing doesn’t reflect the Soros’s holdings in cash or other securities.
Michael Vachon, a spokesman for Soros, declined to comment on the holdings.
Soros cut his stake in Potash Corp. of Saskatchewan Inc., selling 4 million shares of the fertilizer producer while investing in Monsanto Co., the world’s largest seed producer.
Money managers who oversee more than $100 million in equities must file a Form 13F within 45 days of each quarter’s end to list their U.S.-listed stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.
Soros’s biggest sale in the second quarter was his stake in ConocoPhillips, the second-largest U.S. refiner after he sold 4 million shares. The hedge fund also sold its stake in Macy’s Inc., the second-biggest U.S. department-store chain.
Sooo, to me it seems like insider trading and another pay to play scheme. This really needs to be investigated!
Sarah Palin has actually commented on Obama signing off on this foriegn drilling:
Today’s Wall Street Journal contains some puzzling news for all Americans who are impacted by high energy prices and who share the goal of moving us toward energy independence.
For years, states rich with an abundance of oil and natural gas have been begging Washington, DC politicians for the right to develop their own natural resources on federal lands and off shore. Such development would mean good paying jobs here in the United States (with health benefits) and the resulting royalties and taxes would provide money for federal coffers that would potentially off-set the need for higher income taxes, reduce the federal debt and deficits, or even help fund a trillion dollar health care plan if one were so inclined to support such a plan.
So why is it that during these tough times, when we have great needs at home, the Obama White House is prepared to send more than two billion of your hard-earned tax dollars to Brazil so that the nation’s state-owned oil company, Petrobras, can drill off shore and create jobs developing its own resources? That’s all Americans want; but such rational energy development has been continually thwarted by rabid environmentalists, faceless bureaucrats and a seemingly endless parade of lawsuits aimed at shutting down new energy projects.
I’ll speak for the talent I have personally witnessed on the oil fields in Alaska when I say no other country in the world has a stronger workforce than America, no other country in the world has better safety standards than America, and no other country in the world has stricter environmental standards than America. Come to Alaska to witness how oil and gas can be developed simultaneously with the preservation of our eco-system. America has the resources. We deserve the opportunity to develop our resources no less than the Brazilians. Millions of Americans know it is true: “Drill, baby, drill.” Alaska is proof you can drill and develop, and preserve nature, with its magnificent caribou herds passing by the Trans Alaska Pipeline System (TAPS), completely unaffected. One has to wonder if Obama is playing politics and perhaps refusing a “win” for some states just to play to the left with our money.
The new Gulf of Mexico lease sales tomorrow sound promising and perhaps will move some states in the right direction, but we all know that the extreme environmentalists who serve to block progress elsewhere, including in Alaska, continue to block opportunities. These environmentalists are putting our nation in peril and forcing us to rely on unstable and hostile foreign countries. Mr. Obama can stop the extreme tactics and exert proper government authority to encourage resource development and create jobs and health benefits in the U.S.; instead, he chooses to use American dollars in Brazil that will help to pay the salaries and benefits for Brazilians to drill for resources when the need and desire is great in America.
Buy American is a wonderful slogan, but you can’t say in one breath that you want to strengthen our economy and stimulate it, and then in another ship our much-needed dollars to a nation desperate to drill while depriving us of the same opportunity.
– Sarah Palin
I have to say, it is very hypocritical and goes back on campaign promises of being against drilling. But what I am more concerned about is the insider trading going on. If Sorros knew that Obama was going to be doing this, then that was just plain wrong. This needs to be investigated.