You can almost see the U.S. loans from this Brazilian offshore platform (AP)
The emails still come in at least a couple of times a month, although what once was a flood has, thankfully, slowed to trickle. The argument is this: President Obama gave $2 billion of our tax money to Brazil so it can expand its offshore oil industry while he opposes drilling at home. The Brazil’s state-owned oil company, Petrobras, will sell its oil to China. Insert expression of partisan outrage here.
This story has endured for a couple of years, in part because Glenn Beck yammered on about it on Fox News. So to all those outraged about the “Brazilian oil giveaway,” I refer you to the recent $1.5 billion deal by Houston-based National Oilwell Varco to provide equipment for seven drillships in Brazil. The story notes that the deal will create jobs in Houston and is the result of a “growing link between Houston’s oil industry and the South American deep-water powerhouse.” Petrobras plans to spend $225 billion on projects between now and 2015.
The deal underscores the rationale behind the transaction against which Beck and so many emailers have railed during the ensuring years. They complained that Obama signed the executive order to loan $2 billion to Brazil without securing a reciprocal agreement to receive oil. Except Obama never signed an executive order. The loan was made by the Export-Import Bank, which exists to make loans to foreign markets to encourage the export of U.S. goods, in this case, oilfield services. Nor was the money taxpayer funded. The Ex-Im Bank provides loan guarantees for commercial lenders, and it receives no funding from Congress.
In a 2009 editorial, the Wall Street Journal complained that Obama was supporting offshore drilling in Brazil and not in the U.S. The Ex-Im Bank is governed by a bipartisan board, all of whom were still holdover appointees from President George W. Bush at the time the Brazilian loan was approved. In 2009, there certainly was a touch of irony that one arm of the government would be guaranteeing loans to Brazil for offshore oil development while the administration put the breaks on expanding offshore drilling at home. Less than a year later, Obama decided to go ahead with plans to open new areas to drilling — in part to win political support for the ill-fated cap-and-trade bill — one month before BP’s disaster in the Gulf of Mexico caused the administration to put new drilling efforts on hold.
As for China, it does have an agreement to buy oil from Brazil and it, too, agreed to loan money to Petrobras — about five times as much as the U.S. did.
With the economy weak at home, more businesses are seeking sales abroad. That’s increasing U.S. exports, one of the few bright spots in the flagging economic recovery. The “Brazilian oil giveaway” was no such thing. It was an investment in a key developing market for U.S. companies. The National Oilwell Varco deal is a reminder of how those benefits hit home.
The Glenn Beck Show… Fox News… The Wall Street Journal…
Wow, all News Corp properties. Who’d have thought people who immerse themselves in nothing but News Corp outlets would have a slanted view of the world?
See why all these fat cats are getting fatter.
Read TREASON ABOUNDS on internet.
Thank you for the perspective, Loren; too many times its easy to turn a long-term investment into a quick political soundbite but this was truly an investment that will pay returns over time.
Thank you for shedding light on what so many Americans “think” they know.
This will not ever do anything for America and obama wants American oil to go broke. He IS guilty of treason!
Why would this “investment” in a foreign-government-owned oil company be better for our economy than the same investment in a US-privately-owned oil company? Do you think Exxon would have spent less than 35% of the money in the US? The article states that up to 65% of the money/material must be Brazilian.
Wake up. We are going to GET less than we GAVE in this deal.
Cursed with a long memory, I remember when Murdoch got ExIm financing to buy Boeing jets for an Aussie airline he owned. Meanwhile, I wonder if it is still true that the oil field services industry gets more ExIm financing than any other industry, including Boeing.
Thomas Paine, Steffy does not have the ability to wake up and see the truth as he works for PRAVDA of the US Government…. He will never see that the reason that we gave this money to Brazil was because of George Soros who is a huge investor in the company…. Steffy will never understand that we could have used that money here is the USA to drill and probably kept most of not ALL of the jobs here in America…. Not only that but we would be buying OUR oil which means that we would not increase the trade balance we would actually decrease it…. But those little facts exscape their minds as they think that most of us don’t know anything….
I’m Barack Hussein Obama and I approve this political campaign contribution from The Hearst Corporation. They are my comrades.
NOV did not get the contract because the US was involved yet they received for the same reason they do most all new generation rigs….they have the equipment proven to get it done. NOV is a worldwide company and most the installation and servicing will be coming out of Brazil and Norway. I say this as a person that works close to this in the industry. Either way good for NOV! Oh and thank you Obama….my Gulf of Mexico job close to my family now has me in East Africa working on a rig wrapped in razor wire and gun ships to protect us from the Somalian pirates.
That money could have gone to American drilling companies. To argue that a few Houston based companies will benefit is short sighted on your behalf. How many jobs left Houston because of this giveaway is the issue. But since you’re a shill for democrats you can’t grasp that fact.
mike
No, really that money wouldn’t have gone to U.S. drilling companies. It’s a bank loan that is meant specifically to get overseas borrowers to buy U.S. goods. U.S. drillers don’t really have a hard time getting loans these days and most are flush with cash (like most major corporations). If they don’t invest in a U.S. project it’s because they don’t believe they can get a good enough return here vs. elsewhere.
This is an editorial to exonerate Obama who is not in full campaign mode. His buddy George Soros invested $811 million in the Petrobras at the time when Obama was dropping $2 billion into the the government of Brazil who’s president is a past communist gorilla fighter. I understand Brazilian oil is flowing to Gulf storage facilities. As an American I am concerned by an effort that builds competition for our oil companies which in turn effects our home economics including employment. Sounds like the reporter is lauding Obama for building our competition. Am I wrong?
Nice spin piece for Obama. Epic fail…Try again.
Glenn beck may have a low IQ, only qualified to be on a News Corp outlet.
Loren – Thanks for bringing some real-world facts to dispell that tired old argument.
pdh42 says ” He will never see that the reason that we gave this money to Brazil was because of George Soros who is a huge investor in the company”
Oh boy, more Glenn Beck ramblings that are totally false but treated as gospel by conservatives.
a) The US import export bank extended a line of credit to Petrobus for use in buying US made goods and services. The board of this bank is made up of REPUBLICANS APPOINTED BY BUSH Jr.
b) George Soros had sold a majority of his stake in Petrobus before this deal was made.
You’re already on the internet people. Take a second to learn if what you’re hearing has any basis in reality. It usually doesn’t
Nobody knows what really happens in any of these deals behind closed doors. There’s a reason for that…and we’re not allowed to know the real deal, we’re only allowed what they WANT the people to think and say. I know one thing for sure…Obama is behind this deal and many others, and Soros is too, along with a lot of other major players of the world.
GLENN BECK must be very influential to the ignorant….he seems to “Fill in their blanks accordingly”…
I guess the part about National Oil Well Varco getting a contract for services with Petrobras escaped their thoughts, even though it was on the title. an Investment in Brazil has produced a lucrative contract to a US company. For you GLENN BECK economic gurus…this is good for the US.
LOL at “investing” (it was a loan) the money with Exxon. They drill more outside the U.S. than in. Petrobras is also a big player in the Gulf of Mexico. Thanks for the info, Mr. Steffy.