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Elections: privatize (or not) Petrobras?

Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Feb 7, 2022
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 Elections: privatize (or not) Petrobras?

The issue has gained prominence in recent days in Brazil. Candidates for the presidency putting themselves on the line. And there are huge disparities between them!

In theory, a well-run company, whether private or not, is perfectly acceptable, and for excellent reasons:

* delivers fuel at market prices,
* employs many people offering differentiated working conditions and remuneration,
* generates great tax related revenues for the State,
* stimulates a relevant part of the economy and,
* distributes dividends to its shareholders.

In practice here in Brazil, we have seen over time the consequences of a monopoly: commanded by the Brazilian State:

* political-electoral interference
* major corruption schemes
* lack of governance (in fact) in management

It will be more positive for Brazil:

* have more oil companies competing - monopoly is an invitation to inefficiency
* only keep under state control if achieving and maintaining compatible results

None of this is - actually - a "discovery". It is obvious to anyone who deals with companies and institutions.

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