DR NEWS
BY GP
Two energy and power companies controlled by Brazilian mining magnate Eike Batista’s EBX Group have created sponsored American depositary receipt programs to trade in the over-the-counter market, according to The Bank of New York Mellon, which was named as the depositary institution. Oil and gas company OGX, whose $4.1 billion initial public offering on Bovespa last June was Brazil’s largest-ever IPO, has never produced a barrel of oil. It has won exploration rights to offshore oil and gas blocks.
The other company, MPX Energia, raised $1.1 billion in its Bovespa IPO in December 2007. MPX plans to build coal-fired power plants to reduce Brazil’s reliance on hydroelectric facilities, which are vulnerable to periods of drought. It acquired options last year to purchase coal-mining rights in Colombia but has yet to produce any electricity.
Batista founded EBX when he was 23 to purchase gold from local prospectors in the Amazon rainforest to sell to traders in Brazil’s big cities. During the next four years OGX plans to make capital investments of $3 billion, of which $2 billion will be allocated to oil exploration and $1 billion to initial development of production capacity in the Campos basin.
“The company expects 2009 to be a pivotal year, one in which it must implement an ambitious business plan in a short time frame and start transforming prospective resources into proven reserves,” OGX said in a statement announcing 2008 results.
