Page 12 - LatAmOil Week 42 2021

LatAmOil BRAZIL LatAmOil

Bolsonaro mulls Petrobras privatisation

BRAZILIAN President Jair Bolsonaro is con- Ilan Arbetman, an analyst at Ativa Investi-
sidering privatising Petrobras, the national oil mentos, told Reuters that the sale of equity in
company (NOC), as domestic gasoline prices Petrobras would need to be carried out very
continue to rise. carefully. “When we talk about privatising
The right-wing populist president said last Petrobras, we need to be careful because it’s a
week that he intended to discuss the idea with broad process that involves a lot of stakehold-
his economic advisors, according to a Reuters ers. Right now, timing is weighing on it, even
report. “Now I want to privatise Petrobras ... I more than the president’s inclination,” he told
will check with the economic team what we can the news agency.
do about it. Because I cannot control the com- Arbetman also noted that plans for Eletro-
pany, I cannot direct gasoline prices, but when it bras’ sale had been under discussion for a long
rises it is my fault,” he said during a radio inter- time before the government adopted a model for
view cited by the news agency. the sale earlier this year.
Bolsonaro was speaking shortly after Bra- Last November, cash-strapped Petrobras
zilian Economy Minister Paulo Guedes stated slashed its five-year investment plan by more
that the government might sell a portion of its than one quarter. More specifically, it brought its
controlling stake in the NOC in order to finance investment budget down to $55bn in response
welfare programmes. According to a report to the coronavirus (COVID-19) pandemic,
from Bloomberg, Guedes indicated that there which took its toll on the firm and on the Brazil-
were no immediate plans for sale but said par- ian oil and gas sector at large. The cuts will allow
tial privatisation might go forward within the the Rio de Janeiro-based company to focus on its
next decade. deepwater oilfields in the offshore pre-salt zone
Energy costs have been stoking political and unload non-core assets in order to reduce
lately debate in Brazil, where consumer infla- debt. ™
tion rates have hit double digits. In turn, rising
prices have brought Bolsonaro’s approval ratings
down, sparking concern about next year’s pres-
idential election.
Previously, Brazil’s right-leaning politicians
have opposed privatising Petrobras, on the
grounds that the firm is crucial to the coun-
try’s national interests. However, Bolsonaro has
encouraged the sell-off of a number of major
assets in the fuel and power sector since taking
office at the beginning of 2019.
For example, the fuel distribution company
BR Distribuidora, previously a subsidiary of
Petrobras, was privatised in 2019. Meanwhile,
Petrobras is taking steps to divest some of its
downstream refining assets, and the state-run
electricity firm Eletrobras is expected to go pri-
vate early next year. Petrobras is still under state control (File Photo)

ANP delays new gas rules by up to a year

BRAZIL’S state-run oil and gas regulator, the to adopt until 2023, and one of these three is not
National Agency of Petroleum, Natural Gas and anticipated to come into force until August 2023.
Biofuels (ANP), has delayed by up to one year ANP had indicated previously that it
updates to 10 key rules and regulations related expected at least three of the new rules to be
to liberalisation of domestic natural gas markets. adopted by now, with another five slated to take
The rules in question, which cover gas and effect by the end of 2021.
LNG transport, distribution, sales and fares, The rules are designed to open up Brazil’s
were due to be adapted fully by August 2022. domestic gas market, which has long been
But according to the new schedule announced dominated by the national oil company (NOC)
last week by ANP, three of them will not be ready Petrobras.

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