Oil sector praises Prates at Petrobras, but position on prices worries

Entities from the oil and gas sector and unions linked to Petrobras praised the nomination of Senator Jean Paul Prates (PT) for the presidency of the state-owned company, announced this Friday (30th) by President-elect Luiz Inácio Lula da Silva.

However, there is still no definition on when Prates will take office, a stage that depends on the convening of a shareholders’ meeting but can be accelerated by the resignation of the current president, Caio Paes de Andrade, invited to take over as secretary in the government of São Paulo.

With a long career as a consultant, Prates is known in the market and seen as a qualified person who knows the challenges of the sector. He helped write the law that put an end to Petrobras’ monopoly and the concession contracts for exploratory areas in the country.

“First of all, Prates is a prepared name”, says the president of Abegás (Brazilian Association of Piped Gas Distributors), Augusto Salomon. “Throughout his tenure as senator, Prates has always played a leading role in all discussions involving the energy sector.”

In the Senate, he presided over the Parliamentary Front in Defense of Petrobras and was spokesman for a current that questioned the sale of assets of the state-owned company, mainly in the refining area, which the Lula government must reverse.

The position earned him some criticism from colleagues, reinforced after defending changes in Petrobras’ pricing policy, but the major oil companies that operate in the country cite the capacity for dialogue as one of the strengths of the nominee.

“The nominee has a wide academic curriculum and consolidated experience in the sector, combined with the great capacity for dialogue widely demonstrated in the exercise of his recent term as senator”, says the IBP (Brazilian Institute of Petroleum and Gas), which represents the large oil companies with operations in the country.

The IBP is against the revision of the fuel price policy of the state-owned company, adopted in the Michel Temer government and reinforced by the Jair Bolsonaro government, which provides for the monitoring of the import parity, a concept that simulates how much it would cost to import the products.

Prates reinforced this Friday that he understands that prices should not follow this parity. The idea, according to him, is “to arrive at something of reference that is not just the price in Rotterdam plus expenses to place the product here, because 80% is made here”.

“It makes no sense to pay shipping for the product here. There is not much trauma in that”, he said, in an interview shortly before being confirmed in the position.

The position concerns members of Petrobras’ board of directors heard by Sheet. One of them says he hopes it will be a change from the government, with the creation of a stabilization fund, an idea also defended by Prates, without causing damage to the company.

In a report released on Thursday (29), analysts at Goldman Sachs said that the proposals on asset sales, fuel prices and increased investments by the state-owned company “reinforce uncertainties” about the future of the company, which was downgraded by the bank in November.

On the other hand, the position on the sale of assets and fuel prices brings Prates closer to the oil unions, who have opposed Petrobras’ management since the Temer government, when the two strategies gained strength in the state-owned company.

“President Lula’s choices light a flame of hope, sustained by the commitment of this new government with the Brazilian people and national sovereignty”, says the general coordinator of the FUP (Federação Único dos Petroleiros), Deyvid Bacelar.

“The appointment of Jean Paul Prates to the Presidency of Petrobras means a strategic change in the company, since his evaluation of the current management has always had a critical eye”, says Mahatma Ramos dos Santos, researcher at the Institute of Strategic Studies of Petroleum, Natural Gas and Biofuels.