According to Gabrielli, Época wants to divert attention from the 'train scandal'.

Bahia 247

Former Petrobras president José Sérgio Gabrielli remains convinced that there is no need for Congress to establish a CPI (parliamentary commission of inquiry) to investigate the state-owned company based on information from lobbyist and former BR Distribuidora director Jorge Augusto Henrique, who denounced an alleged bribery scheme in Petrobras contracts involving the PMDB party.

According to Gabrielli, the publication by Época a week ago may have the objective of "diverting attention" from the Siemens cartel scheme that operated in bidding processes for trains and subways in São Paulo.

"One issue is created to obscure another. I believe that this article in Época magazine has that intention. I don't know if it will succeed. Because the data and facts of what I'm calling the 'train scandal' are quite significant. The fact is that I think the attempt to create another confusion, trying to involve the PT in something it has nothing to do with, is something that, if it exists (I'm not saying it does), is a problem between the source and the PMDB. To create an atmosphere of generalized chaos, that everyone is the same, everyone is a dog. I think that's the motivator," says the former president of Petrobras in an interview with the Bocão News website.

Gabrielli further details the "plan to break up Petrobras so it could be sold off by governments prior to" that of former President Lula, and also explains once again the fateful purchase of the Pasadena refinery in the US. The Workers' Party member compares the deal to buying a refrigerator.

"There's confusion between what's being publicized, the famous US$1 billion, between the cost of the refinery and the costs of the acquired inventory and the additional expenses for the refinery. In common language, it's more or less like buying a refrigerator. The refrigerator has a capacity. Then you go to the supermarket and buy various products to fill the refrigerator. You can't include the cost of your supermarket shopping in the refrigerator's cost. They are different things."

Below are the main texts and here The complete interview with José Sérgio Gabrielli on Bocão News.

Secretary, the August 9th edition of Época magazine published a serious allegation regarding lobbying within Petrobras during your tenure. The whistleblower, João Augusto Henriques, spoke about various activities he carried out while working for the company abroad. He links decisions to the selection of companies and the allocation of commissions to deputies and political activists affiliated with the PMDB party. What do you have to say about this matter?

Let's coldly analyze what's written in Época magazine. What's written is a statement from a citizen who makes a series of self-references about what he did or didn't do. Regarding me, where he says there was a conversation between me and Senator Romero Jucá about the Petrobras CPI (of 2009), I categorically deny it. It's a lie. Senator Jucá also denied it. This conversation didn't happen. Now, if it was a conversation between me and Jucá, and I'm saying it didn't happen and the senator also denies it, he (the accuser) must be delusional. Even if I had said it was true, that's another contradiction of his; he says I created problems afterward. In fact, the contract that Petrobras made (with Odebrecht) took a long time because we were discussing how to resolve the issue of the company's solid waste in ten different countries. All the discussion time was spent adapting the contract to the ten countries. Therefore, it's an illogical accusation. Then he even makes up a story, because for me it's fabricated, since I didn't talk to João Vaccari (the PT's finance secretary at the time) about this, that it would be to help President Dilma's campaign. That's also a strong figment of his imagination or the reporter's. I don't see any reason for a CPI (Parliamentary Commission of Inquiry) in this aspect, because it's an inference made either by him or by the reporter. I don't know this man. I've never met this man. I was against his appointment to the international directorate of Petrobras in 2008, due to his experience at BR Distribuidora between 1993 and 1999. I arrived at Petrobras in 2003, years after he left. But I had information about who he was. Therefore, I don't see why there should be a CPI for me. Now, if the PMDB wants to create a CPI because they know him, because they have relations with him, and because of the accusations he makes against PMDB deputies, that's their problem. I have no reason to be involved in that.

Secretary, the magazine report reveals that the international directorate was given by President Lula to the PMDB party, and the PMDB members ended up controlling this issue of commissions for closing deals. What was the PMDB's relationship with Petrobras at that time?

There is no relationship between the PMDB party and Petrobras. There is no relationship with the PT party. There is no partisan relationship with the Petrobras board of directors. The Petrobras board of directors is a collegial body. Decisions, before reaching the board, go through a group of technicians, committees, and procedures. Nothing is decided in isolation at the board level. This accusation is very strange. It's so strange that the author himself denies it. An accusation that the author denies, that the accused deny, becomes news because it's published in a magazine...

What was daily life like during the 2009 Parliamentary Commission of Inquiry? What were the people like inside the company until the case was closed?

What the PPS and PSDB are saying is not true. The CPI (Parliamentary Commission of Inquiry) was concluded; it was not shelved. The PPS and PSDB withdrew from the CPI, but it was concluded. There is a concluding report. Obviously, a CPI disrupts a company, especially one the size of Petrobras. You end up with constant pressure from rumors, inferences, accusations, and suspicions that are not confirmed. Within the company, we created a whole set of sectors dedicated during the CPI to respond quickly. And we had an initiative that, at the time, provoked great discussion in the press, but which everyone now accepts as an important and pioneering initiative: the Petrobras Blog (Facts and Data). For the first time, a break in the monopoly of the print media was created in the management between the generator and the user of information. We began to respond to the press with information that belonged to the company, before the press did. A crisis was created in the relationship between the press, which believes it has a monopoly on information, and the source of information, which is us. This is common nowadays. With Mídia Ninja, with social media, all the mechanisms for direct access between sender and user are not a problem, but at the time it provoked the wrath of the media against us (Petrobras). We clearly stated that we were breaking a monopoly of the press as a mediator between the origin of information and the user of information. This is the change we will have from now on. This happened in 2009, not 2013.

Do you admit that Petrobras' appointments are politically motivated and that there are partisan connections involved?

There is no relationship between Petrobras and political parties. Once a party nominates someone, that person becomes a representative of Petrobras. Management and behavior are tailored to the company. The whistleblower himself says this. He claims that Zelada is being pressured because he cannot deliver what they (PMDB members) wanted. The article is full of inconsistencies. Petrobras is an organized company with technicians and professionals who have processes. Decisions are the result of this. If the citizens who are directors have party affiliations, that is their right. I was president of Petrobras and I never denied my party affiliation. I always denied using Petrobras to help the PT. Here in Bahia, in fact, I had problems.

There is still discussion about a shift in logic regarding the relationship between technical and political needs after former President Lula took office. Did this happen? As if politics began to dictate technical solutions, whereas before it was the other way around. Did this actually happen, or are the issues now interconnected?

They are in dialogue, they are in dialogue. In the example of the Pernambuco refinery, it's an exaggeration to say it was a purely political decision. It wasn't just political. First, the discussion of a refinery in the Northeast arose as the need to increase refining capacity in Brazil began to be seen. This was due to the demand for gasoline, jet fuel, and LPG derivatives in Brazil. Before that, when Petrobras was being prepared for sale, several negotiations took place in 1993 and 1994 for Petrobras refineries to be incorporated by other groups. Negotiations with Arab and Japanese groups occurred before Lula came to power. These negotiations included refineries in Ceará, Maranhão, and Pernambuco. The refinery in Pernambuco was established as a company before 2003. Therefore, it's an idea that has been worked on for some years. Why in the Northeast? The largest refinery Brazil has in the region is in Bahia. It's the northernmost in the country. However, 19% of the fuel market is in the Northeast, and as the region tends to develop, it's necessary to consider alternatives. When the Abril and Lima refineries were conceived, as well as those in Pernambuco, Ceará, and Maranhão, the Brazilian market wasn't as robust as it is today. The initial vision for a refinery was to process diesel for export to Europe, as it's closer to Europe. It was easier to transport crude oil from Campos, in Rio de Janeiro, in tankers to the Northeast, process it, and export it from there. With Brazil's growth, this logic has been reversed. Refineries need to serve the domestic market. The discussion of where in the Northeast to build a refinery shouldn't be merely a political one. First, in Rio Grande do Norte, the port is a limiting factor. There, it's 5 km deep and five meters deep; there isn't enough draft for a ship to reach. Ceará had problems with land regularization, which remains one of the obstacles to installing a refinery in that state. The issue of land regularization is crucial. Pernambuco had the Port of Suape, which was more or less in the center of the region. At that time, it still had an association with PDVSA. The company began negotiations before Lula.

Secretary, this was just the latest controversy involving your name at Petrobras. What about the Pasadena operation?

There's confusion between what's being publicized, the famous US$1 billion, the cost of the refinery itself, the costs of the acquired inventory, and the additional expenses for the refinery. In common parlance, it's roughly equivalent to buying a refrigerator. The refrigerator has a certain capacity. Then you go to the supermarket and buy various products to fill the refrigerator. You can't include the cost of your supermarket shopping in the refrigerator's cost. They are different things. A refinery with a capacity of 100 barrels was purchased in two stages. In the first stage, US$190 million was paid for 50 barrels. In the second stage, US$296 million was paid for the remaining 50 barrels. The difference in value occurred because the second part was a court-ordered transaction. In total, it was US$486 million. This amount divided by 100 barrels of capacity results in US$4.860 per barrel of capacity. The average cost of refinery purchases in 2006 was US$9.740. Petrobras purchased capacity for half the average market value at the time. Alongside the capacity, it acquired a trading company for products and derivatives with inventory. For the inventory, it paid US$170 million initially and another US$170 million later, totaling US$340 million. In addition, it purchased a bank guarantee for commercial operations for US$173 million, which is unrelated to the refinery purchase. With charges and other expenses, this legally amounted to US$999 million. The final agreement, including the beginning and end, totaled US$1.1 billion. I don't know the details of this difference because it was handled by President Graça Foster; there must be some exceptional elements resulting from legal actions. From a technical standpoint, the Pasadena negotiation has no anomalies.

Even if you paid half the market value?

I'm going to use an expression that I find interesting, and that was used by a senator during the hearing in Congress. 'Everyone knows that the farmer buys lean cattle to fatten them up and sell them.' In the case of the refinery, the concept is the same. You buy a refinery that isn't the best in the world to invest in it, improve it, and then process it. The strategy is to buy, invest, and profit from it. This is a strategy defined in 1999. It wasn't defined by us. The strategy defined there was to expand refining capacity abroad by 300 barrels per day. The decision was made because from 1995 to 2005, fuel consumption in Brazil was stable. It was between 85 and 95 m³ per year. It wasn't growing. It was stagnant. When we arrived at Petrobras with President José Eduardo Dutra and myself, during this transition, we maintained this policy until 2005. From 2005 and 2006 onwards, we started to grow, and after that, it took off. Over the last three years, 41%. Today, we're at around 140 m³ per year. We went from 95 m³ to 140 m³. The growth is extraordinary. Because the fleet increased, the harvest increased, the roads improved, people started flying – air passengers alone will go from 40 million to 150 million per year in seven years. The strategy pointed to finding a refinery abroad, one that wasn't very good, but that could process Brazilian oil. This was done. From a strategic point of view, it was correct. But then came a surprise. The world collapsed in 2008. The American market sank. World consumption plummeted. Margins tightened. Everyone pulled the handbrake on investments. Then came the crisis with our partner. The partner is a marketer, not a refiner. He has a more short-term vision, like everyone in the sector. We had a legal battle that lasted from 2008 to 2012. It was a highly litigious divorce. I explained this in the Senate, and I believe this issue will not resurface because it became clear that there was an exaggeration, a hype, and a misinterpretation of the facts.

Before we move on to more political matters, would you venture to say that if former President Luiz Inácio Lula da Silva had not won the 2002 election, Petrobras would have been privatized?

I believe there are three very interesting elements to this strategy. The first point is this: an oil company makes its living by discovering oil. To find out, she needs to have an area suitable for discovering oil. In 1998, Brazil changed the law and began to have auctions. Four auctions were held between 1998 and 2002. Petrobras was barred from participating in these auctions. So, if you prevent a company from exploring new areas, what happens to its future? Either it goes abroad, and Petrobras did, or it will cease to exist. The oil will run out, there's no way around it. Secondly, the refineries and the internal organizational logic of Petrobras were an exaggeration of the concept of a business unit. The company was structured as several business units, and these various units have an interesting concept in which you can see what each unit contributes, but in doing so, you lose the advantage of the corporation as a whole. You will then have legal, technical, maintenance, and service responsibilities in each unit. We made a big change in 2003, which was to say: look, the company is organized into business units, but what's important is the corporation as a whole. The company as a whole is more important than any individual part of the company. As it grew stronger as a separate part, it could easily be sold as a separate part. As if she were being sliced ​​up. In my view, it was being prepared to be paid in installments. It would be a dismantling of the Petrobras system, which would then focus on 30% of the exploratory horizon, in addition to having some refineries. She was inhibited, prohibited, excluded from petrochemical activity. Petroquisa had been privatized. It wasn't expanding and had no possibility of entering the alcohol market. In the electricity sector, the contracts we encountered were absurd. Including one with Eike Batista, which is the contract that Petrobras was actually paying to its private partner for the thermoelectric plant under conditions that resulted in permanent losses. Under those conditions, Petrobras could never expect any return on investment. We have completely transformed the gas industry. Today, Petrobras has an internal thermoelectric power plant with the capacity to generate 7.3 thousand megawatts of electrical power, which is equivalent to the Brazilian share of Itaipu, and we dismantled these contracts. These contracts were also part of the privatization of Petrobras. Finally, I would say that from a personal standpoint and in terms of what is fundamental to the oil industry, which is scientific and technological development, it has been dismantled. Senge, the engineering sector of Petrobras, was dismantled. It was said that Petrobras would not develop technology because it could buy technology on the market. We reversed all of that. We doubled Petrobras' research capacity. We facilitated the set of thematic networks with more than 100 Brazilian university institutions. We set up a network of laboratories across the country. We have created several hundred research groups that are funded to work on problems related to hydrocarbons. The previous version was to diminish Petrobras, to break Petrobras into smaller parts, and therefore, the inevitable solution would be to sell it. When we arrived in 2003, Petrobras was worth 15 billion dollars, and today, after all the crisis and all the problems, we are worth more than 100 billion dollars. When people say that Petrobras' value has plummeted, they compare it to 2010 and 2009, but why not compare it to 2002? In 2009 or 2010, we were in the presidency. I challenge anyone to compare 2003 to 2013 with 1993 to 2003 and see how well Petrobras was managed.

If all these changes hadn't been made, would the pre-salt layer not have been discovered?

The pre-salt layer wouldn't be the only thing discovered. Many other things as well. In this quest to expand exploratory activity, we had two important things. In the first auction of the Lula government, Petrobras came in with a bang. It acquired a lot of areas, including some of them alone – which was not common. Second, it adopted an exploration policy north of the Campos Basin and discovered the Espírito Santo Basin. It went south of the Campos Basin and discovered the Santos Basin and the pre-salt layer. If it weren't for this quest to expand exploration, we wouldn't have discovered the pre-salt layer.

Could some of the motivations behind these accusations be related to the discovery of the subway cartel in São Paulo? Do you believe that the accusations might be intended to divert attention from the investigation?

I think so. That's usually what happens. One issue is created to obscure another. I believe this article in Época magazine has that intention. I don't know if it will succeed. Because the data and facts of what I'm calling the "train scandal" are quite significant. The fact is that I think the attempt to create another mess, trying to involve the PT (Workers' Party) in something it has nothing to do with, is something that, if it exists – I'm not saying it does – is a problem between the source and the PMDB (Brazilian Democratic Movement Party). To create an atmosphere of generalized chaos, that everyone is the same, everyone is a dog. I think that's the motivating factor.