Tuesday, April 7, 2015

"Maybe the oil didn’t exist at all. Maybe the whole thing was a giant fraud"

From Tyler Cowen's interview with Peter Thiel:

PETER THIEL: . . . there was one, again, in recent years, and they all turned out to be false dawns. They were all linked to Brazil being tied into globalization. The optimism about Brazil, was always from all the potential that will happen, when it became linked to globalization, and then the disappointment happens when it turns out it doesn’t work.

There was this giant energy company called OGX. The guy who started it was worth $30 billion in 2011. He’s now worth −$1 billion. You met with him in Rio de Janeiro. He had a McLaren parked in his living room in the villa, on a pedestal. He had just divorced his wife. He told me, “I can now park my car wherever I want.”

[laughter]

PETER THIEL: They had all these offshore oil concessions they’d gotten from the government, in relatively shallow water. It seemed like a fantastic investment. Then, it turned out you could only get Brazilian oil service companies to develop it. There were no Brazilian oil service companies.

Maybe the oil didn’t exist at all. Maybe the whole thing was a giant fraud. Very hard to tell.