The team that prepares the energy plan of the Lula government, elected this Sunday (30), wants Petrobras to return to areas abandoned by previous administrations, and with more focus on expanding activities than on remuneration to shareholders.
It also defends a new fuel price policy and is studying the creation of a price stabilization fund, which would limit transfers in the event of abrupt fluctuations in the international market.
The strategy has been discussed by specialists linked to the sector, gathered in a group led by the former Minister of Finance, Aloísio Mercadante. Lula has also defended the resumption of investments in refining and contracts with the Brazilian naval industry, issues that were also left aside after Temer.
The PT government plan talks about “Brazilianizing” fuel prices, leaving aside the PPI (Import Parity Price) and considering that a relevant portion of production costs is made in national currency.
The model is criticized by oil companies and importers, on the grounds that it can harm imports needed to complement national supply.
The pre-salt gains cannot be eroded by an internationalized and dollarized pricing policy: it is necessary to Brazilianize the price of fuels and expand the national production of derivatives, with an expansion of the refining park.
When disclosing this Thursday (3) the profit of R$ 46.1 billion in the third quarter of 2022, the CFO of Petrobras, Rodrigo Araújo, defended the maintenance of prices linked to the international market.
“Without market prices, there is a risk of product shortages, with obvious negative consequences for society as a whole,” he wrote, in the text accompanying the state-owned company’s balance sheet.
To reduce this risk, members of the group defend the resumption of the debate on the account to stabilize prices, financed by royalties and space participation collected on oil production and by dividends from Petrobras.
The idea has already been debated in Congress, but it took a back seat after the government decided to support proposed federal and state tax cuts to contain the rise in prices in the first half.
It was criticized at the time by the Minister of Economy, Paulo Guedes, for whom this type of fund is expensive and does not bring results.
The changes intended by the PT, however, go well beyond the price of fuel. The Lula government puts a stop to the proposed privatization of the state-owned company and wants “an integrated energy company, investing in exploration, production, refining and distribution”, as the electoral program says.
It also wants to return to segments abandoned by previous administrations, such as those “that connect to the ecological and energy transition such as gas, fertilizers, biofuels and renewable energies.”
The fertilizer sector, for example, is seen as strategic, in an attempt to reduce Brazil’s dependence on imports. The state-owned company even started work on two nitrogen fertilizer factories under Dilma’s government, but the projects were abandoned after the start of Operation Lava Jato.
The return to renewable energy is seen by advisers of the new government as essential to maintain the company’s survival in a future with greater restrictions on oil production. The segment was removed from the company’s strategic plan in the first year of the Bolsonaro government.
The refining area is also back on the radar, after six years of attempts to sell refineries, a process that has so far only been successful at the Mataripe Refinery, in Bahia, since December 2021 under the management of the Arab Mubadala fund.
The price stabilization fund would help make investments in new refineries viable, according to people who have been helping to formulate the proposals.
The expansion of the state-owned company’s areas of operation and, consequently, the volume of investments directly impacts the state-owned company’s dividend distribution policy, which has brought investors closer to the Bolsonaro government in recent years.
In the first half of 2022, Petrobras was the largest dividend payer in the world, according to manager Janus Henderson. In the third quarter, the state-owned company announced the distribution of R$ 43.7 billion, bringing the total paid for the year’s results to R$ 180 billion.
The reaction of PT president, Gleisi Hoffmann, shows what the party thinks about the matter. “We do not agree with this policy that takes away from the company its investment capacity and only enriches shareholders. Petrobras has to serve the Brazilian people,” she wrote.
Lula’s government program does not address the issue, but the market’s reaction to questions about the value distributed shows that investors already expect a Petrobras different from the current management. Even after the good quarterly result, the company’s shares plummeted on the stock market.
Mercadante’s adviser told Sheet who needs to wait for the appointment of the transition team to comment on the matter. Some of the proposed changes depend on changes in the company’s bylaws, such as the fuel pricing policy.
Sources interviewed by the report argue that the controlling shareholder has more influence in the management, a scenario limited by the Law of State-owned Companies, which restricts political appointments for the administration of these companies and prevents them from acting in support of public policies.
The most quoted name to preside over Petrobras under Lula, for example, is Senator Jean-Paul Prates, affiliated with the PT.
These restrictions, however, were disregarded by Bolsonaro this year, with the election of an aligned council, made up mostly of public office holders. Bolsonaro also abandoned international price parity during the campaign for the second round.
In the text that accompanies the balance sheet, Petrobras’ CFO defends the current strategy, repeating the argument that a strong company contributes to society by paying dividends and taxes.
“The numbers make clear the value that a company can generate for society and its shareholders, by making the right choices”, wrote Araújo.
What Lula’s program about Petrobras preaches
- Strong opposition to privatization
- Strategic plan oriented towards energy security, national self-sufficiency in oil and derivatives, guarantee of fuel supply in the country
- State-owned will once again become an integrated energy company, investing in exploration, production, refining and distribution
- Acting also in segments that connect to the ecological and energy transition, such as gas, fertilizers, biofuels and renewable energies
- Transition to a new fuel and gas price policy, which takes into account national costs and is suitable for expanding investments in refining and distribution and reducing cost
- Preservation of the pre-salt production sharing regime, in which the government is entitled to a share of the oil produced
Chad-98Weaver, a distinguished author at NewsBulletin247, excels in the craft of article writing. With a keen eye for detail and a penchant for storytelling, Chad delivers informative and engaging content that resonates with readers across various subjects. His contributions are a testament to his dedication and expertise in the field of journalism.
