Veja and Globo inflated Eike's lies to the unsuspecting.
The main headline in this Sunday's Folha de São Paulo reveals that, in 2012, Eike Batista told his shareholders that he could extract 1,8 billion barrels from his oil wells, already aware that the maximum volume would not exceed 315 million; in that same year, two journalists, columnists Lauro Jardim, from Veja magazine, and Ancelmo Gois, from Globo newspaper, fueled this fantasy; Lauro even said that Eike's oil would come from shallow waters, making it easy to extract; Ancelmo flattered the then-billionaire, whom he calls "Eike Always Him Batista" every day; also in 2012, Veja published the famous cover "Eike Xiaoping," when it would have been better to call it Eike Xingling.
247 - Eike Batista lied to his investors. According to the main report in Folha de S. Paulo this Sunday (read hereOGX declared to the market that it could extract 1,8 billion barrels from its oil wells, when internal audits of OGX already indicated that the maximum volume would be, at most, 315 million barrels – and even then with tremendous geological risks, given the distance and depth of the wells.
Disseminating false information to the capital market is a crime. In developed countries, it carries criminal implications, potentially leading to imprisonment for those responsible. This is especially true because this type of fraud can ruin families. Eike's shares, which were trading at over 20 reais last week, were valued at 13 cents.
Eike, however, was not alone. In his entrepreneurial journey, he relied on two powerful allies in the media: none other than the leading columnists in Rio de Janeiro: Lauro Jardim, from Veja magazine, and Ancelmo Gois, from Globo newspaper. Both helped amplify the businessman's fantasy.
In January 2012, Lauro Jardim published a note that mentioned 2 billion barrels and even said that the oil was in the shallow waters of Paraty – in other words, it would be easy to extract. Read below:
Eike and Dilma
Eike: 2 billion reasons to smile
OGX, from Eike Batista[Name omitted] recently informed the CVM (Brazilian Securities and Exchange Commission) of the discovery of oil in the Santos Basin. These reserves, which are not mentioned in the announcement, are equivalent to 2 billion barrels of oil, according to what he told Dilma Rousseff yesterday.
It's a volume capable of making a lot of noise in the oil world. To put it in perspective, the estimated reserves in the pre-salt layer are 5 billion barrels.
The difference is that the oil discovered in Eike Batista's wells is in shallow waters, both in pre-salt and post-salt areas. The production cost, therefore, will be lower than if it were in deep waters.
The discovery took place 102 kilometers off the coast. In a straight line, it is located 80 kilometers from Paraty.
A coincidence destined to become part of the folklore of Brazil's richest man. According to the account he gave yesterday to Dilma Rousseff, when he told her about the discovery, Eike stated that the discovery was made on the 63rd attempt – 63 being the lucky number of the superstitious businessman.
In the conversation, Eike compared Brazil's pre-salt adventure to the space race undertaken by the US in the 60s:
John Kennedy wanted to go to the moon. It seemed impossible, but the US succeeded. It's the same thing with the pre-salt oil reserves.
Meanwhile, Ancelmo Gois inflated the character, whom he calls "Eike Batista Always Him," and promised even more: 3 billion barrels. Read below a note from January 16, 2012:
PetroEike
Eike Batista has discovered oil just 130 km off the coast of Parati in shallow waters. The initial estimate is that this OGX field alone could contain 3 billion barrels of light oil.
Dilma and Lobão have already been informed.
In January 2012, Veja also published the famous "Eike Xiaoping" cover, complete with an editorial by the editor-in-chief, Eurípedes Alcântara.
It would have been better to call it "Eike Xingling".