Appointed to Petrobras, he helped break the state monopoly and today questions the sale of refineries

Appointed this Thursday (29th) to preside over Petrobras, Senator Jean-Paul Prates, 54, has not always been on the side of the PT in matters related to the regulation of the oil sector in the country. Today, he is critical of the state-owned asset sale process and defends mattress to amortize fuel hikes.

The definition of this mattress will not be its function at the state-owned company, but the indication signals that the Luiz Inácio Lula da Silva (PT) government appreciates the idea, which would depend on approval in Congress for demanding the use of public resources, such as oil royalties and company dividends.

The Lula 3 government will start under strong inflationary pressure due to the possible end of the federal exemption, which has a great impact on gasoline, and due to the unfreezing of the ICMS reference price, which will have a greater impact on diesel and bottled gas.

Lawyer and economist, master in Energy Planning and Petroleum Economics, Prates has a long history of acting in the sector, in some cases on the opposite side of the PT. He collaborated, for example, with the law that put an end to the Petrobras monopoly, a project that was opposed by Lula’s party.

He also helped draft the new concession contracts, which brought large global oil companies to explore reserves in Brazil, a process also questioned by the unions that today support his nomination.

Prates began his approach to politics in 2005, when he took over as Secretary of Energy for Rio Grande do Norte. In 2014, he was elected first alternate to Senator Fátima Bezerra (PT-RN) for a term until 2022.

In January 2019, he took over as senator after Bezerra was elected to the state government. He was Minority Leader in Congress and, in a move considered a shift by some peers, vice-president of the Petrobras Defense Front.

In that capacity, he led a movement in Congress that questioned the sale of Petrobras assets, accusing the Jair Bolsonaro (PL) government of using “subterfuge” to shrink the company without congressional authorization.

The main focus was the sale of refineries, carried out through the creation of SPEs (Specific Purpose Entities) that separated the units of the legal entity from the state-owned company.

“One thing is a business that the company entered, did not like and wants to sell, such as a wind farm, solar energy, mining and even petrochemicals,” he told Sheet, in season. “These people understand that, even though they are subsidiaries, they are subsidiaries that are not part of the backbone of the company.”

In another interview, Prates defended that the reduction of Petrobras’ participation in refining should be the subject of debate with society, due to the risk of creating private fuel supply monopolies in some regions.

“It’s as if Burger King were hegemonic in a city and decided to sell half of the stores to Mc Donald’s, giving up the market”, he compared. He stressed that he is not against the participation of private actors in the refining segment, but stating that it is not Petrobras’ role to decide that.

“Who has to worry about competition is the government, not the company”, counters Prates. “This shows the level of government interference in the company, ordering Petrobras to sell assets to make cash”, he adds.

The government transition team has already made it clear that it will suspend the process of selling refineries and that it will go further, encouraging the company to expand fuel production capacity in the country, either alone or in partnership with private companies.

The appointment of Prates depends on the resignation of the current president of Petrobras, Caio Paes de Andrade, who accepted a position in the elected government of São Paulo, but still remains in charge of the state-owned company.

Afterwards, it needs to be endorsed by the company’s board of directors, today almost completely aligned with Bolsonaro. The renewal of the council depends on the convening of an assembly by the new government.

Prates ran for alternate senator in the 2022 election and was a member of the transition government team for the energy area, but the government understands that there are no impediments to his appointment by the State-Owned Companies Law or by the company’s statute.

The PT understands that there are no restrictions, claiming that the law does not prohibit the nomination of candidates, but of people who worked in electoral campaigns.