Thursday, 9th September 2010 by David Thorley

CORRECTION: This story, about Petrobras′ share sale, which ran on 6 September, mistook the Brazilian counsel to the issuer and the underwrtiers. In fact Machado, Meyer, Sendacz e Opice Advogados is acting for Petrobras, and Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados for the underwriters. We republish the story with our apologies.

The deal has yet to be priced but could be a contender for the world′s largest equity deal

Brazil′s state oil company Petrobras has retained Machado, Meyer, Sendacz e Opice Advogados and Cleary Gottlieb Steen & Hamilton LLP to advise on its share sale, whose value has been quoted as potentially worth much as US$75 billion.

Shearman & Sterling LLP and Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados are advising the underwriters to the deal, which is set to be priced at the end of the month.

Offshore firm Walkers is also advising Petrobras in the offering, which will comprise a sale of new stock and a stock swap deal.

A team of lawyers in Shearman & Sterling′s New York and São Paulo offices is being led by New York partner Stuart Fleischmann, who has advised the underwriters to the Brazilian company′s equity issuances for a decade.

Cleary Gottlieb is also known as counsel to Petrobras, and has a relationships with the company going back at least to 2000, when it acted in Petrobras′ project finance deal with Japanese company Nissho Iwai and Indonesia Petroleum.

Brazil′s Senate approved Petrobras′ recapitalisation plan in June, prompting the country′s lawyers to gear up for a new wave of investment.

A number of Brazil′s lawyers are anticipating an increase in work in the oil and gas sector in the wake of the deal, while others predict that the company′s dominance of the market may ultimately limit their scope to exploit the opportunities that the country′s pre-salt oil reserves may present.

Luis Pacheco of Veirano Advogados says, ′After the deal has been closed Petrobras will speed up investments in exploration activities in the pre-salt fields, and there should be an increase in legal work in the contract and corporate areas for new-coming service companies.′

Alexandre Chequer of Tauil & Chequer – affiliated with Mayer Brown LLP expects to see a short term increase in work in the country′s oil and gas practices ′related to Petrobras′ demand for services and equipment.′

′In the mid and long term,′ he adds ′we will all lose since the number of players in the sector tends to be quite small since Petrobras could be the sole operator developing the pre-salt reserves.′

But although Petrobras dominates the Brazilian oil and gas market, Chequer says that from a lawyer′s perspective, work for the sector′s smaller players can give lawyers a degree of freedom. ′Sometimes, being on the other side, you get a better clue about how to discuss what really matters,′ he says.

Schmidt, Valois, Miranda, Ferreira & Agel Advogados partner Paulo Valois foresees a role for lawyers in negotiating the involvement between Petrobras and other oil companies in pre-salt exploration and production.

He forecasts that ′the contract model which will be approved after Brazil′s presidential elections in October will provide for production-sharing agreements in the pre-salt areas, which will be operated by Petrobras.′

That means, he says, ′Any international or national oil company which might be interested in exploring opportunities in the pre-salt cluster will participate in the venture as a non-operator. That model fosters the participation of financial partners that would bear the costs and expenses related to those operations.′

Petrobras′ Brazilian counsel, Machado Meyer, drew on its resources both in São Paulo and Rio de Janeiro, with one member of its team, Giovanni Biscardi, having told Latin Lawyer this June that the opportunities provided by exploration of the pre-salt oil layer mean that Rio is becoming a more important base for the country′s firms.

′There was a time when Rio-based talent considered moving to São Paulo to boost their careers. Now, there is a clear sign that this move is not necessary, with Rio providing great opportunities for those who are in search of interesting and complex deals,′ he said.

Counsel to Petrobras

Brazil

·         Machado, Meyer, Sendacz e Opice Advogados

Partners Daniel Faco and Giovanni Biscardi, and associates Cristina Tomiyama, Daniel Szyfman and Marcia Lencastre 

·         Motta, Fernandes Rocha – Advogados

Partner Luiz Leonardo Cantidiano 

US

·         Cleary Gottlieb Steen & Hamilton LLP

Partners Nicolas Grabar and Francesca Odell, senior attorney Carla Passos, and associates Dana Stringer and Vivian Lee

·         Walkers 

Counsel to Bank of America Merrill Lynch, Banco Bradesco BBI, Banco Santander, Citigroup Global Markets, Itau BBA, and Morgan Stanley

Brazil

·         Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados

Partner Sergio Spinelli 

US

·         Shearman & Sterling LLP

Partners Stuart Fleischmann, Rob Ellison, Don Lonczak and Sami Tountounji, and associates Mathias von Bernuth and Anasby Fernanda Iacia 

(Latin Lawyer 09.09.2010)

(Notícia na Íntegra)