President Luiz Inácio Lula da Silva of Brazil raised cheers and applause at the São Paulo stock exchange on Friday morning after Petrobras concluded the biggest share issue ever undertaken.

“It wasn’t in Frankfurt. It wasn’t in London. It wasn’t in New York. It was here in São Paulo!” he said of the offer by the national oil company.

Petrobras raised $67bn in its share issue, priced on Thursday night. Of the total shares sold, about $42.5bn worth will go to the government in payment for the rights to 5bn barrels of oil in Brazil’s newly discovered pre-salt fields, so called because they are trapped under several kilometres of seawater, rock and a hard-to-penetrate layer of salt.

This means Petrobras will receive about $24.5bn in fresh capital – a vital contribution to its ambitious $224bn investment programme for 2010-2014. The money will also bolster its balance sheet, letting it borrow more while keeping indebtedness within its self-imposed limit of 35 per cent of equity, regarded as necessary to preserve its investment-grade rating with the world’s leading credit rating agencies.

Earlier in his speech, Mr Lula da Silva said: “In contrast with the past, we are not here to debilitate the state or to sell off public assets. A weak state has never been synonymous with a strong private sector.”

Those words echo the concerns of many investors, that the government would use the share issue to increase its control over Petrobras, reducing the stake of minority shareholders as part of a move to increase public control over Brazil’s fast-growing oil and gas industry.

By Friday afternoon, figures had not been published to show how many shares had been bought by the government and how many by private investors. But Guido Mantega, finance minister, said that after the operation the share of Petrobras’s total capital held by the government and other public-sector entities had increased from 40 per cent to 48 per cent.

Many analysts had expected the government’s share to increase to 45 per cent – itself regarded as a serious dilution of minority shareholders’ interests.

Demand from minority shareholders certainly seems to have been less than expected. Petrobras initially planned to sell 2.17bn voting shares and 1.59bn non-voting shares. These were priced at R$29.65 and R$26.30 respectively.

This made the initial offer worth $61.75bn. Petrobras sold additional lots bringing it to $67bn. It had been prepared to sell extra lots equal to 25 per cent of the initial offer, which could have made the total offer worth $77.2bn.

The total had been increased by 10 per cent on September 17, in an apparent sign of very high demand.

“In the end they decided not to issue the full amount in order to get a higher price,” said one person involved in the operation.

Petrobras shares closed down 2.8 per cent to R$26.29 in São Paulo on Friday.

Total demand from existing shareholders and new investors was $87bn, another person involved said. This means the amount sold was oversubscribed by $20bn, or about 30 per cent, much less than the 100 per cent oversubscription some participants had talked of.

It is unclear how many shares, over and above the $42.5bn worth it received in payment for exploration rights, were bought by the government. But a rough calculation based on the increase in its overall stake suggests public-sector entities bought some 65 per cent of all the shares sold.

Legislation before Congress would create a new state-owned company, known as Petro-Sal, to oversee exploration of the pre-salt fields and make Petrobras the sole operator. This, people in the industry say, will stretch its resources to the limit – and may soon see it coming back to the capital markets for more.

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