It was May of 2011, and the setting was the Michael Milken conference in California.
Although investor skepticism was starting to rise even then, Eike Batista, worth roughly $30 billion at the time, was still his usual, confident self. He was going to be richer than Carlos Slim, Warren Buffet and Bill Gates, he told CNBC at the time, because "I have created five companies that have in them embedded resources worth $2 trillion at a very low cost of producing." He went on to call them "idiot-proof assets."
Fast-forward to today. Those assets are valued a lot closer to zero than $2 trillion. One of his five companies, oil and gas driller OGX—the cornerstone of his short-lived mining, energy and shipping empire—is expected to file for bankruptcy any day. And he's essentially held a yard sale for his other holdings, all in an effort to find cash.
Batista once compared his oil fields, located off the coast of Brazil in the Campos Basin, to those of Saudi Arabia. But today, OGX produces not a single barrel of oil. Four out of five fields are abandoned, after oil production there turned out to be dramatically below expectations.
"Higher than anticipated geological complexity" is the reason for the production failure, according to a recent report from Moody's, which rates the company's debt as junk.
Those who lent Batista money or invested alongside him are some of the biggest names in corporate America and the investing world—General Electric, BlackRock, Pimco, Loomis Sayles, Lord Abbot, the Ontario Teachers' Pension Fund.....