Temasek Double Bet on Brazil Oil

Temasek Holdings, the investment company owned by the government of Singapore, bought a stake in Brazil’s Odebrecht SA, an oil rig and platform supplier, last October. Then in November Temasek bought 106 million in Petroleo Brasileiro SA (Petrobas) shares. Odebrecht  rents rigs and platforms to Petrobas, so Temasek has invested in two connected businesses.

So far, Temasak has done well. The value of the shares rose after the purchases. Middle Eastern political turbulence pushed up the price of oil while increasing demand for the commodity from non-Middle Eastern producers such as Brazil.

But Temasak has double exposure. Isn’t that too many eggs in one basket?

No, it’s not too much risk, because Temasak is a long-term investor that can wait out market slumps, says a consultant. It may hold these stakes for many years and buy other oil-related businesses in emerging markets.

This is another example of large investors’ liking for Brazil.

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