Petrobras – past, present and future

Image: Disclosure/ Petrobras
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By JEAN MARC VON DER WEID*

The cause of Jean Paul Prates' frying, apparently, é the problem of distributiontion of dividends, but if this é the cause, it remains to be seen what would be done with these resources

1.

The controversy surrounding the dismissal of Petrobras president Jean Paul Prates is not being opened to the public by the actors involved. Jean Paul Prates himself, President Lula, the Minister of Mines and Energy, Alexandre Silveira and the head of the Civil House, Rui Costa, took great pains to hide the center of the crisis and the reasons that lead to the Petrobras president's ardent fry. When this text is released, it is possible that the new director of the state-owned company will already be appointed, given the temperature of the oil used in the process. Aluísio Mercadante? It's the hot topic, but what does he think about the threat of a global energy crisis? What does he propose as an energy policy for Brazil? And how do you see Petrobras’ role today and in the future?

Petrobras was created against the dominant opinion among Brazil's economic elites, after a broad campaign with the slogan “the oil is ours”. It was the beginning of the 1950s and the most ambitious objective was self-sufficiency in fuels. But for a few decades, oil prospecting in Brazil, centered on dry land, yielded little results and our dependence grew.

With the Juscelino Juscelino Kubitschek government's option for land transport in cars and trucks, demand grew while production continued to decline. We have made some progress in refining and distribution, with Petrobras playing a dominant role. There was no shortage of people questioning Juscelino Kubitschek's option, defending investments in train and cabotage transport, as well as an emphasis on public transport in cities. But oil was very cheap and the production of vehicles powered by diesel and gasoline prevailed and defined our mode of transport to this day.

Everything was complicated by the crisis caused by OPEC in 1973, with a rebound in 1979, which sent oil prices soaring and drained resources from our economy to meet fuel demand. The balance of payments went into the red and remained in that color for many years. On the other hand, the abundance of petrodollars made it easier for the Ernesto Geisel government to take out loans, taking our external debt to high levels. And everything got even worse in the 1980s with the rise in interest rates on loans and debt payments, in a devastating vicious circle that marked what became known as the “lost decade”.

With oil prices at higher levels, prospecting on the continental shelf became viable. All over the world, oil companies invested in these new areas, as traditional areas were no longer resulting in significant and profitable new wells. But the discoveries in the North Sea and the Gulf of Mexico were the only major discoveries. Petrobras stood out for technological advances that allowed the location of wells in ultra-deep waters and in the pre-salt, which began to be operated in the 2000s.

It was our late entry into the ranking of countries with significant reserves, although with costs among the highest on the planet. The self-sufficiency project returned to the scene during President Lula's first government (although we never achieved it in a stable way), even more so due to the new big jump in crude oil prices in 2008.

2.

In the 2000s, the approach of what became known as “peak oil” was already being discussed around the world (peak oil, in English). Conventional oil production actually reached its highest production level in the second half of the decade and many estimated that there would be a depletion in the production of all types of liquid fuel in the following years.

The United States, however, invested heavily in the exploration of residual oil trapped in already depleted wells and in other deposits with the same type of geology. The technology of “fracking” allowed the US to return to oil self-sufficiency for the first time since 1970, and pushed the predicted depletion of liquid fuel sources into the third decade of the XNUMXst century. However, it is an expensive technology and the explored wells run out quickly, requiring new investments in a short time. The pace of extraction of this type of oil is already slowing down and some reputable experts point to a peak in the coming years.

Meanwhile, both governments and major oil companies are investing in alternative energy sources in various parts of the world, even though there is no brake on the extraction of known oil reserves, despite its ominous impact on global warming. It is believed that the desire for profits will maintain this pattern until the point is reached where the energy investment to extract oil or another type of liquid fossil fuel makes the operation impossible. Screw the planet, as long as profits pile up and investors are happy.

In Brazil we have crucial decisions to make. Aiming for oil self-sufficiency means accelerating the depletion of existing wells and this is expected by the end of this decade. The obvious alternative is to invest in replacing fossil fuels, and this was stated both by Lula, candidate and president, and by Jean Paul Prates. But both Jean Paul Prates and Lula are betting on expanding the oil supply, with the proposal for exploration on the northern platform.

It is a large investment that could be used in efforts to promote solar and wind energy, in research into “green hydrogen” and in changing the mode of transport in the country. Furthermore, this bet means increasing our contribution to global warming. Maintaining this standard means running towards the precipice that awaits us, in Brazil and in the world, if we wait to face the announced energy crisis when it explodes.

There is yet another important objection to this policy of burning fossil fuel “to the last drop”. It is necessary to remember that oil is not just fuel, but raw material for almost every industrial complex in the world. And if there are already alternative solutions for using oil as a fuel (although it is neither an easy nor sustainable exchange for a long time), there are no substitutes for oil as a raw material for industries such as plastics, clothing, medicines, computers and many others. . It would be a strategic option for Brazil and the world to accelerate the replacement of the use of oil as fuel and save oil reserves for use as industrial raw materials, while researching alternatives for the future.

Jean Paul Prates seems to have some notion of the contours of this crisis, although he does not disclose his analysis. I say this because he showed that Petrobras should not invest in refineries, which were raffled off at a bargain price during the governments of Michel Temer and João Bolsonaro. This can only be explained if he is aware that the refineries (which represent a high investment) will become disused long before the costs incurred are amortized.

And, although he insists on the exploration of new wells in the pre-salt, he does not fail to insist on the role of Petrobras as an energy company and not just as an oil company. Unfortunately, the company's investment plan in the area of ​​alternative energy is unclear and unambitious. It is necessary to debate with society the goals, deadlines and investment volumes relevant to face the ongoing crisis. He has not done so so far and may be replaced without these underlying issues becoming clear to the general public.

And it does not seem that Aloísio Mercadante is willing to face the perfect storm of a debate that puts obstacles in the direction adopted by the new Lula government. As with several other initiatives, Lula is repeating his past policies, such as subsidizing the automotive industry to stimulate the economy. And put pressure on Petrobras to hold down fuel prices, a perfect measure for those who don't want to promote its replacement.

And why, after all, is Jean Paul Prates being fried? Apparently the cause is the cucumber distribution of dividends, but if this is the cause, it remains to be seen what would be done with these resources. There is talk of investing in the construction of ships and platforms for Petrobras, or in the repurchase of refineries or distribution companies. It's spending a lot of money looking back. We are decades behind in this debate.

*Jean Marc von der Weid is a former president of the UNE (1969-71). Founder of the non-governmental organization Family Agriculture and Agroecology (ASTA).


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