'In defense of Petrobras', Aloysio wants to open up the pre-salt reserves.
Senator Aloysio Nunes (PSDB-SP), who was the vice-presidential candidate on Aécio Neves' (PSDB-MG) ticket, openly supports opening the pre-salt reserves to international companies in an article titled "In Defense of Petrobras." In the text, he explains why he defends ending the production-sharing regime, which grants exclusivity to the Brazilian company in the pre-salt reserves with at least 30% of the blocks, and proposes concessions. According to him, in the pre-salt auction, "two giants of the sector, Exxon and Chevron, withdrew from the bidding." Aloysio also stated that "no company will invest in the long term alongside a weakened company," forgetting that Shell and two Chinese companies partnered with Petrobras in the Libra field. Shouldn't the article be titled "In Defense of Exxon and Chevron"?
247 - Senator Aloysio Nunes (PSDB-SP), who was the vice-presidential candidate on Aécio Neves' ticket, published the article this Tuesday. "In defense of Petrobras", in which, despite the title, he criticizes Petrobras and defends opening the pre-salt reserves to international firms such as Exxon and Chevron.
According to him, the profit-sharing regime, which gives Brazilian companies exclusive rights to at least 30% of the pre-salt blocks, should end, being replaced by a return to concessions.
Aloysio also said that "no company will invest in the long term alongside a weakened company," forgetting that Shell and two Chinese companies partnered with Petrobras in the Libra field.
Read the text from the senator below:
In defense of Petrobras
The choice of the profit-sharing regime during Lula's government brought problems from the start. Concessions, on the other hand, make Petrobras more efficient.
Amidst the corruption allegations plaguing Petrobras, the company estimates it has lost up to R$ 6 billion due to the bribery scheme investigated by Operation Lava Jato. Although President Dilma Rousseff has stated that Petrobras has rid itself of those "who took advantage" of the company, there is a long way to go to restore the credibility of the country's largest state-owned enterprise.
According to calculations by Tendências Consultoria, the expected 30% reduction in the oil company's investments would cause Brazil's GDP to fall by 1,2%. BNDES, in turn, suffered a loss of R$ 2,6 billion due to what it called a "prolonged and significant decline in the market value" of the oil company.
These factors reflect the difficulty Petrobras faces in making its business plans viable. It is more than necessary to reignite the discussion on how oil should be explored in our country.
I am the author of Senate Bill No. 417/14, which seeks to eliminate the profit-sharing regime for pre-salt oil exploration contracts. The matter is currently in the Constitution and Justice Committee and is awaiting the appointment of a rapporteur.
The rules established in the sharing agreement require that any company interested in exploring it form a consortium with Petrobras, in which the state-owned company holds a minimum stake of 30%.
Furthermore, the operational committees of the consortia must have half of their members appointed by the government. This model scares away investors. No company will invest in the long term alongside a weakened company.
The choice of the production-sharing regime, established during Lula's government, brought problems from the start. In the 2013 pre-salt auction, only 11 companies registered. This number fell short of the 40 expected by the National Petroleum Agency.
It's worth remembering that two industry giants, Exxon and Chevron, withdrew from the bidding process. The delay in holding the auction (the pre-salt reserves were discovered in 2007) and strong state interference were some of the reasons for these companies' withdrawal.
As an alternative to ensure the best use of pre-salt resources, I propose resuming the concession regime, which is still in effect for other oil fields in the country. This model—established during the Fernando Henrique Cardoso administration—combined with opening up the company's capital, is what brought us closer to self-sufficiency.
It is worth remembering that it was during the two oil crises of 1973 and 1979 that Brazil's external debt reached over US$200 billion. Brazil had to borrow money abroad to pay upfront for oil, which was scarce on the planet, and thus accumulated monumental debts.
It was the concession model, therefore, that contributed to generating a profit of R$ 62 billion for Petrobras during the FHC administration and paved the way for the company's growth in the following years.
It must be said that any eventual privatization of Petrobras has nothing to do with the oil exploration system, but rather with the composition of its share capital. According to Law No. 9.478/1997, sanctioned by FHC, the Union maintains controlling interest in Petrobras by holding at least 50% plus one of the voting shares.
The concession brings more competition between companies and makes Petrobras more efficient. Furthermore, the population is no longer held hostage to the whims of bureaucratic groups. And it's already clear: staffing a state-owned company according to the interests of certain political parties only generates losses. Not only for the company, but for all Brazilians.