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