Nominated for Petrobras, has already defended fuel price parity

Appointed by the government to preside over Petrobras, chemist José Mauro Coelho has already defended the practice of international fuel prices in the country, claiming that artificial prices could cause shortages in the market.

Coelho was appointed this Wednesday (6th) to replace General Joaquim Silva e Luna in charge of the state-owned company, after consultant Adriano Pires rejected the government’s invitation to the position. Coelho has a 14-year career in the government energy area, which he left in 2021 to relocate to the private sector.

In an interview with TV Brasil in October, shortly before resigning, he reinforced the state-owned company’s argument about the need to practice prices in line with international quotations, since Brazil is an importer of part of the volume of fuel it consumes.

“We have to have prices in the domestic market related to import parity prices. If that were not the case, we would not have any economic agent with the aptitude or desire to bring derivatives to the country. And we would have a risk of shortages,” he said.

He argued that the rise in prices was a global problem, a reflection of the recovery in international prices after the hardest period of the pandemic.

“India, for example, currently has the highest prices in history. Spain has been experiencing higher prices since 2014. It is an issue that has been impacting the world in general and also impacts our country.”

And he defended the proposal to change the model for charging ICMS on fuels, a flag of President Jair Bolsonaro (PL) that ended up being approved by Congress in March.

Coelho started his public career at EPE (Empresa de Pesquisa Energética), the state-owned company responsible for planning the sector, which he left in 2020 after occupying the position of director of Oil, Gas and Biofuel Studies for about four years.

During the Lula government, he collaborated with the development of the new legal framework for oil and gas, which established production sharing contracts and Petrobras’ exclusivity in the pre-salt operation, a model that was overturned years later by the Michel Temer government.

The model guaranteed the Union participation in the production of the largest oil fields in the country, but was criticized by the market for giving Petrobras control over operations and for suspending auctions in pre-salt areas for five years.

In 2020, Coelho took over as secretary of Petroleum, Natural Gas and Biofuels at the MME, where he worked with the current minister, Bento Albuquerque, and from where he resigned amid pressure from truck drivers against high fuel prices.

In a note released at the time, the ministry said that he was leaving to work in the private sector. “After the regulatory period of quarantine, José Mauro will return to the national energy sector, now to take on new challenges in the Brazilian private sector,” the ministry said in a statement released at the time.

Currently, Coelho holds the position of chairman of the board of directors of PPSA (Pré-Sal Petróleo SA), the state-owned company responsible for representing the government in the pre-salt production sharing contracts, which give the Union part of the oil extracted.

Graduated in industrial chemistry, Coelho was a university professor between 1995 and 2007 and had a stint in the Army between 1983 and 1991, as an artillery officer, according to the MME. He has written three books on the oil industry, focusing on the oil and natural gas refining and distribution segments.

During its time at EPE, the state-owned company presented a study on the expansion of the Brazilian gas pipeline network, which saw potential for the construction of 16 new stretches in the country, including a branch connecting São Carlos (SP) to Brasília, a project that has already been by businessman Carlos Suarez.

The 2019 study was not determinative, that is, it presented possible solutions to bring gas from supply points to growing markets or markets not yet served by the network in operation to help with investment decisions.

Suarez abandoned the project because he was unable to close a gas supply contract for a fertilizer factory that Petrobras planned to build in the Triângulo Mineiro, considered essential to finance the pipeline.

“With the New Gas Market, we will have more competitive prices and, with more competitive prices, we may have demand,” said Coelho at the time of the study’s launch. The EPE foresaw expenditures of at least R$ 7.2 billion in this project.

Relations with Suarez helped to overturn the appointments of Adriano Pires and Rodolfo Landim to the command of Petrobras and its board of directors, respectively.

The appointment took the market by surprise but was well received in the oil sector. Investors are still looking for information about the executive.

The general coordinator of the FUP (Federação Único dos Petroleiros), Deyvid Bacelar, criticized the nomination, saying that Coelho is “another bureaucrat, convenient, sensible and defender of privatizations and the current fuel price policy”.