Governor Paulo Hartung is not Brazilian, he is only from Espírito Santo.

In an article published in Valor Econômico this Monday (06/02), the governor of Espírito Santo, Paulo Hartung, defends changes to local content rules as a way to speed up investments in Brazil's pre-salt oil fields.

In the article, Hartung emphasizes:We cannot allow anachronistic rules to undermine the opportunity for wealth creation.".

The question is: wealth creation for whom? 

It is natural for the governor to advocate for the possibility of increased state revenue from the oil and gas sector, but the analysis needs to be more thorough and consequential. 

In the case of Petrobras, it is necessary to defend Brazil, not just State A, B, or C. 

I am also from Espírito Santo, however, more important than being from Espírito Santo is being Brazilian. I believe this is our obligation as citizens.

The current president of Petrobras, Pedro Parente (who has nothing Brazilian about him), in an article published in Folha de São Paulo last Wednesday (February 1st), showed his clear intentions when he said:

"Ideologies, when taken to extremes, make people impervious to arguments and facts. Discussing the origin of capital invested in Brazil is an example. Superseded by the Constitution, which makes no distinction between national and foreign capital, this discussion has little use in real life."

This is not about ideology or aversion to foreign capital. When capital comes to contribute to Brazilian development and generate jobs, such as factories (automobiles, agricultural implements, etc.) or infrastructure (airports, highways, ports, etc.), it will always be welcome. But when capital aims simply to exploit Brazil and its people, generating jobs and new technologies abroad, we cannot accept it.

In the early days of colonial Brazil, Portugal invested in ships and personnel to exploit brazilwood. They devastated forests to transport the wood to Europe. They invested heavily. And what remained in Brazil? The devastated forest.

Then they invested even more heavily to explore for gold in Minas Gerais. Many Portuguese lost their lives in this adventure. Those were very difficult days to survive. To give you an idea, a head of cattle that was worth 15 grams of gold in Salvador was worth 300 grams of gold in Ouro Preto.

Well, they took all the gold. And what was left in Brazil? Only the holes.

Brazil is now experiencing the largest oil reserve discovery in decades. A great and real opportunity to elevate the country to a new level. And are we going to hand it all over like we did during colonial Brazil?

Engineer Alberto Machado Neto, director of the Brazilian Association of Machinery and Equipment Industries – ABIMAQ, in a publication on the Engineering Club website, highlighted the problems faced by Brazilian companies in supplying Petrobras and stated:

"Starting with Petrobras' dual personality when it comes to overseeing the projects it contracts in Brazil and those it contracts abroad. In Brazil, companies need to build extensive facilities for dozens of state-owned company inspectors, with standardization criteria for the rooms to be offered to employees, such as specific details for the location of trash cans, distances between windows and doors, number of chairs, and a myriad of QHSE (Quality, Health, Safety and Environment) requirements that need to be added to the costs. Abroad, however, as in some large-scale projects sent to China, the company sends very few inspectors for work of the same level of complexity, requiring much leaner structures and without the same rigor of standardization."

One of the results of this is a schizophrenic approach, which has already occurred in some cases in recent years, where platforms arrive from Asia with various problems to be fixed. Brazilian companies with a history of success in terms of price, deadlines, and quality – of which there are many – end up being called upon to rescue Petrobras, reviewing and redoing what was poorly done.

The president of Petrobras (Pedro Parente) has, on several occasions, used the Libra platform bidding process as a negative example of what Brazilian industry is supposed to be like. He alleged a 40% overpricing for construction in Brazil. It would be a mockery to argue that the company would pay this extra amount to carry out projects in its own backyard. The problem is that the data supporting Parente's statement have never been detailed for the public or the national market, which is eager for opportunities and has become increasingly competitive, with many companies exporting to other countries – both foreign companies operating from Brazilian facilities and national companies that have gained a foothold in the international arena. More than once, the executive has been invited to disclose these figures and allow the industry to evaluate them. If his belief is in arguments, why not allow the national market to present its own? In this discussion without dialogue and openness, there is no progress. It becomes ideological baggage.” 

To expect a national company to compete with industries from countries that employ practically slave labor, where there are no social benefits such as vacation, 13th-month salary, severance pay, retirement, etc., makes no sense. Furthermore, the requirements imposed by Petrobras on Brazilian suppliers in terms of QHSE (Quality, Health, Safety, and Environment) far exceed what is normally required in the Brazilian market. None of this is demanded abroad.

I've already written many articles about Pedro Parente's lies. Saying that the cost here is 40% higher is just another lie, and that's why he can't show the cost spreadsheets.

Governor Paulo Hartung should be paying closer attention to what is happening at Petrobras. The sale of company assets by Parente, in violation of the law, is causing losses greater than many Lava Jato operations, as demonstrated by studies conducted by the Association of Petrobras Engineers – AEPET, the Brazilian Federation of Geologists – FEBRAGEO, and the Association of LPG Distributors – ASMIRG.

The elimination of local content is just one part of the larger, treasonous project underway, which aims at the complete destruction of Petrobras. So, if things continue this way, for the sake of consistency, we should change the name of Brazil to Land of the Holy Cross.