U.S. Loan to Brazilian Oil Company Riles Conservatives in Favor of Offshore Drilling

President Obama has opposed any expanded oil drilling off American shores largely on environmental grounds, turning a deaf ear to conservative cries of "Drill, Baby, Drill."

But now Obama may start hearing cries of "foul" after the U.S. Export-Import Bank promised Petrobras, Brazil's state-owned oil company, $2 billion in loan guarantees to help finance lucrative drilling off the shores of Rio De Janeiro.

Some see a contradiction in an executive branch agency, independent but with board members appointed by the president, facilitating abroad the very kind of energy exploration Obama opposes domestically.

White House spokesman Robert Gibbs said Thursday he wasn't prepared to address the issue.

"I have not seen the story," he said. "I'd have to take a look."

But former Alaska Gov. Sarah Palin, a vocal proponent of offshore drilling, had plenty to say.

"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 $2 billion of your hard-earned tax dollars to Brazil so that the nation's state-owned oil company, Petrobas, can drill off shore and create jobs developing its own resources?" she asked on her Facebook page.

In fact, the Export-Import bank receives no appropriations from Congress and thus does not rely on American taxpayer dollars and is also not "sending" $2 billion to the Brazilian company but offering lines of credit to U.S. firms so they can compete to land contracts as part of Petrobras' drilling operations.

The $2 billion "preliminary commitment" by the Export-Import Bank to Petrobras is expected to grow, as the U.S. competes on behalf of American exporters of goods and services against those from China. Beijing has extended a commitment of $10 billion -- but the Brazilians are said to prefer U.S. management and technology.

Then there is the George Soros angle.

The New York-based hedge fund firm controlled by the billionaire philanthropist and backer of Democratic causes and campaigns bought and sold millions of shares in Petrobras -- the largest of the firm's holdings -- prior to public disclosure of the Export-Import bank's offer of new credit guarantees to the Brazilian energy giant.

No one has accused Soros of wrongdoing, but some say the transactions do not pass the "smell test."