Barracuda-Caratinga Leasing Co., B.V.

MIGA is providing a $72 million guarantee for investments by Itochu Corporation, Mitsubishi Corporation, and Deutsche Bank AG in two deep-sea oil and gas production facilities in the Campos Basin, Brazil's largest offshore oil and gas reserve. The agency is providing an additional $48 million in coverage through its Cooperative Underwriting Program. The guarantee covers the investment against the risks of expropriation and transfer restriction. Japan's Ministry of International Trade and Industry (EID/MITI) has also issued coverage for a syndicated commercial bank loan.

The project entails the construction of floating production, storage, and offloading facilities in the Barracuda and Caratinga oil and gas production fields located about 80 kilometers off the coast of the state of Rio de Janeiro. The investment will expand capacity by building on infrastructure that is already serving the Campos Basin.

The facilities will be owned by Barracuda-Caratinga Leasing Co., B.V. and operated and maintained by Petrobras, Brazil's national oil company. By leasing the facility, Petrobras has been able to reduce its financing burden, which has improved its financial position and thereby facilitated its partial privatization.

Project construction began in July 2000, with oil delivery projected in 2003. The project will increase the energy generation capacity and availability of domestically produced oil and gas for the Brazilian petrochemical and energy industries, and is expected to increase the oil processing and production capacity of the Campos Basin by about 300,000 barrels a day. An estimated $1 billion in oil imports will be substituted a year, since all production outputs are destined for the local energy market. The project will create about 3,000 jobs during the construction phase and 300 jobs during the operational stage. Extensive training will be provided.