Brazil has a new president and the nation seems to be experiencing a financial uptick rooted in its energy sector, but a number of questions remain.
Brazil’s two most recent former presidents were both caught up in a massive public scandal related to that nation’s semi-public, state-run oil agency, Petrobras. Both were also from the left of that nation’s political spectrum. The resulting backlash led to the election of right-wing candidate Jair Bolsonaro.
While his far-right social views and anti-crime rhetoric resulted in headlines, energy policies are not only at the root of how Bolsonaro came to power, they comprise some of the key issues driving Brazil’s financial future.
After the impeachment of Brazil’s previous president Dilma Rousseff in late August 2016, questions about how the next Brazilian president would govern the energy sector were inevitable. Though Rousseff won election in 2014, accusations about theft and money laundering during her time (2003-2010) as chair of Petrobras culminated in her removal from office. Meanwhile, many on the left viewed the criminal accusations against her and her predecessor as pure politics, especially as former president Luiz Inácio Lula da Silva ran against Bolsonaro from his jail cell until dropping out of the race in September.
Because Petrobras is such a large corporation ($90 billion in revenue in 2017), any ownership changes could have wide-reaching consequences for its international partners, its holdings around the world, and the future of oil and gas exploration and production off the coast of Brazil.
This has already been proven out by financial markets. The election resulted in shares of Petrobras getting an immediate boost, but prices for those shares have continued to fluctuate in reaction to any relevant comments made by the new president. As is so often the case, the reason for this volatility is uncertainty.
How will Bolsonaro, who is inexperienced when it comes to governing large agencies, tackle challenges that arise in the energy sector? Is corruption at Petrobras a thing of the past? And most importantly, will he keep campaign pledges to privatize Petrobras?
As a long time congressman, Bolsonaro has a marked protectionist voting record. However, a key economic advisor for his election campaign, Paulo Guedes, vocally supports privatization of Petrobras, which led to the candidate Bolsanaro pledging to privatize Petrobras.
Which will it be? Will Bolsonaro privatize Petrobras or enact the protectionist policies?
U.S. national security adviser John Bolton calls Bolsonaro “like-minded,” and says that his election is a positive sign. No doubt, his combative rhetoric concerning China mirrors that of the current U.S. President, Donald Trump. This seems to indicate that Bolsonaro is hesitant to make Petrobras available to the highest bidder.
Already, Bolsonaro has expressed concerns that China might buy Petrobras in order to gain influence in Brazil, a comment that had some investors pulling back from the energy giant. In that interview, Bosonaro said his privatization pledge would not extend to the core business of Petrobras, suggesting that recent moves, such as the company’s agreement to sell a $1.5 billion stake in Nigeria (including two deepwater exploration blocks) may indicate a willingness to sell foreign assets, while holding onto domestic control.
Either way, the next few months could determine not only the future of Brazilian politics, but whether investors trust a relative newcomer to the world stage to effectively manage one of the world’s largest corporations.
By Greg Leatherman, ON&T Senior Editor
New NOAA Report Examines National Oil Po
Contracts Awarded in New Generation Ocea
Hydro Group’s Unveils New Front-Runner f
New Technology for Harvesting Energy fro
Scientists Discover New Marine Life in A
NSU President Teaches Underwater Lesson
Offshore Technology Conference Elects Ne
New Short Film Highlights the Increasing
AML Oceanographic Introduces New Profili
New SubConn® 13 Pin Low Profile Power an
AIRMAR Introduces New Chirp-Ready Broadb
Hemisphere GNSS Announces New Crescent®
AW-Lake Company Announces New Turbine Fl
UVS Appoints New Technical Sales Manager
Sonardyne International Ltd. Appoints Ne
Osiris Projects Among First to Purchase
Ocean Alliance New Headquarters in Glouc
CGG Appoints Arnaud Surpas as Executive
Deepocean Group Holding Hires New Chief
New Exploration Opportunity - Offshore M
Telenor Satellite Broadcasting A.S. Sele
Bluefin Acquires SeeByte Adding New Soft
Imtech Marine Provides Complete Heating,
New Industries Passes 1,000,000 Man-hour
Drones Open Way to New World of Coral Re
Eni Norge Opens New Operations Center in
New Vice Chancellor for Marine Sciences
New Earth and Marine Science and Technol
VIKING’s Super New LifeCraft™ to the Res
Bluefin and NRL Complete Long-Endurance
UCLA Report Urges New Global Policy Effo
New Study Suggests Coral Reefs May be ab
Birns, Inc. Announces Strategic New Hire
WOC and the Nautical Institute Launch Ne
New Generation of Micro Sensors for Moni
Gulf of Mexico Research Initiative Annou
Subsea Americas Opens New Facility
New Order for Danish Yachts
Exocetus Development LLC Sets New Shallo
Fugro Opens New Office in Mozambique
NOSP – a New Powerful Entity
Australia: A New Reef? We’ve Already Got
TGS Announces Four New Multi-Client Surv
New Revolutionary Nano-Filler Solves Wor
New Industries Expands Piping Fabricatio
Broco® Underwater Introduces the New Ult
OIL & GAS UK Discuss New Offshore Well I
New £8 Million Training Center for the O
New Regional Manager for Aquatic Asia Pa
KONGSBERG Chosen as Engineering and Tech
NASDive – The New Standard in Diver Comm
Sonardyne Appoints Anthony Gleeson as Ne
New, Compact in situ pCO2 Sensor (C-sens
New Enhanced Key Options Introduced For
New SubConn® Coax Connector Series
New Tool Available to Help Track Spilled
Scientists Call for New Stewardship of t
Falmouth Scientific Appoints New Sales &
New Cygnus DIVE with AMOLED Display
February: UV Irradiation: A New Kind of
MRT to Expand Globally from its New Humb
From Sensor to Desktop with Sonardyne’s
Falmouth Scientific Announces a New Low
New Industries, Inc. Completes 173-ton M
DNV GL Opens New Vietnam Office to Suppo
New 3D Atlas Makes Trace Metals in the O
BP Appoints New Chief Scientist
Trelleborg Launches New Compact Series o
New Study Shows Heart Abnormalities in F
Unique System FZE Announces the Launch o
New IUCN App for Marine Invasive Species
2G Robotics Announces New Office in Aber
Seanic Announces New Leader of Standard
Seanic Announces New Leader of Standard
Demand Grows for new Generation Ocean Ro
Ocean Sonics Announces New Partnerships
CSA Announces New Regional Manager for F
A New Cable Project for the Grid Connect
EdgeTech’s New 6205 Bathymetry System Ma
NOAA Commissions New Fisheries Survey Sh
NOAA Gives Mariners New Way to See Surfa
DeepOcean Picks New Leopard Concept for
New Subsea Report on Technology, Safety
New Chairman Introduced at Decom Offshor
Liquid Robotics Names Gary Gysin as Pre
Applied Acoustics Introduces New Low Cos
New Fanbeam Laser Radar Delivers High Ac
From New York to New Orleans: America's
Seafloor Experts Publish New View of Zon
New Biodiversity Study Throws Out Contro
Global Rental Market Leaders Susbsea Tec
CSB Releases New Computer Animation of 2
CSA Conducts Substantial Sediment Profil
Xtera Awarded Contract to Build New Subs
J2 Subsea Showcases New 3” Titanium ROV
Ocean News & Technology is a publication of TSC
7897 SW Jack James Drive
Suite A, Stuart, FL 34997
(772)-221-7720