Oil in Foz do Amazonas could be a new Petrolão

Although it is still under debate, oil exploration in Foz do Amazonas is already raising concerns about the possibility of turning into a new corruption scandal similar to the “petrolão”. After 15 years, the “black gold” discovered in the Campos Basin (SP), in the early 2000s, currently corresponds to 78% of the country’s oil production. However, Operation Lava Jato showed the country that pre-salt exploration was marked by diversions, which cost Petrobras millions.

The testimonies collected from those investigated in the operation in 2015, both by the Federal Police and in Congress, revealed that the state company Sete Brasil, created to explore the pre-salt, was the epicenter of the payment of bribes in exchange for the company’s contracts for the construction of 28 drill ships for Petrobras. According to former Petrobras Services director Renato Duque, the contracts earned the PT around US$133 million in bribes.

The scandal was notable for involving President Luiz Inácio Lula da Silva (PT) and strongmen from his previous governments, such as former Minister of the Civil House Antonio Palocci. In a plea bargain to the then judge Sergio Moro, Lula’s right-hand man said that the PT member encouraged the corruption scheme after the discovery of the pre-salt. “He even ordered the directors to make more party reservations from then on,” Palocci said at the time.

Whether the scheme can be repeated in the case of Foz do Amazonas is still unknown. But the region’s profit potential and the PT’s return to command of Petrobras raise doubts among experts about how the resources obtained, in the event of exploration, will be managed by the PT administration.

Estimates from the Ministry of Mines and Energy (MME) indicate that exploration could yield 10 billion barrels, US$200 billion (R$1 trillion) in revenue and 350,000 jobs.

It is important to highlight that the exploration of Foz do Amazonas has not yet had the hammer dropped. The process between the environmental study, the feasibility study on the exploration and installation of oil platforms is a process that can take years and may not even be started during the Lula government. In the case of the pre-salt, for example, the discovery occurred in 2006, but exploration only began in 2010.

PT back at Petrobras

15 years after the discovery of the pre-salt and with the PT back in power, Petrobras changes the course taken by former president Michel Temer (MDB), and continued by former president Jair Bolsonaro (PL). The attempt to change the State Law, which opens up the possibility of political appointments, could reinforce the modus operandi PT candidate for allocating positions in public administration.

Bill 2896/2022, which changes Law No. 13,303/2016, was filed by the transitional government in December and approved by the Chamber of Deputies. However, the proposal is blocked in the Senate. At the time, the objective was to facilitate the appointment of the current president of the National Bank for Economic and Social Development (BNDES), Aloizio Mercadante.

The former minister under former president Dilma Rousseff had political party activities in the PT shortly before being appointed to the position, which, in theory, was prohibited by law. He was president of the Perseu Abramo Foundation, an entity linked to the PT. However, an opinion from the Federal Audit Court (TCU) paved the way for Mercadante to take up the position at BNDES.

The relaxation of the State Law is a potential risk, as there is no evidence so far that it is used to appoint Petrobras managers.

Another point that shows a change of direction in relation to the policy adopted by Temer and Bolsonaro is the attempt to reverse the sale of refineries controlled by the oil company. It was defended by the company’s president, Jean Paul Prates, and shows that the government wants to maintain spaces of control and reaffirms the nationalization policy that marked the governments of Lula and Dilma.

The rehabilitation of companies convicted of corruption in Lava Jato, such as Odebrecht (currently Novonor), Andrade Gutierrez and UTC is another point of distrust regarding the new management of the oil company. According to the state-owned company, the companies are now on the list of pre-qualified suppliers.

The result of nine months of the oil company’s new management was announced at the beginning of August: a 47% drop in profit in this second quarter compared to the same period in 2022. Net profit went from R$54.3 billion to R$28, 78 billion.

In the meantime, the change in the Governance and Compliance Department also raises concerns about the company’s direction. In May, Prates appointed the specialist in compliance regulatory Mario Spinelli to the board. He replaced Salvador Dahan, whose term ended in May.

Analysts say that the president of the state-owned company brought a name closer to the PT government. Spinelli is a former general controller of the state of Minas Gerais and is seen as close to the Minas Gerais PT.

For economist Adriano Pires, director of the Brazilian Infrastructure Center (CBIE), and who was even considered to take over as president of the company last year, the risk of a corruption scheme – like the “petrolão” – still exists.

“The risk exists. Now, society needs to be more attentive. We cannot stop exploring oil due to the risk of corruption. But the ingredients are there. The current government is not free from the mistakes of the past and Lula wants to return to command the oil sector in the rear view mirror. As you study oil exploration on the equatorial margin, you have all the elements to return to the situation back there”, he said.

“I think the PT needs to understand that Brazil has changed. We have to stay alert. Petrobras had the largest corporate debt in the world and was in the police pages”, said the economist.

He said that Petrobras should maintain the agreement it made with Cade (Administrative Council for Economic Defense), whereby it should sell refineries to control only half of the current refining capacity.

“Petrobras needs to focus on exploring oil and gas, because you have a much higher profit margin. Refining, on the other hand, is an industrial activity, where the margin is not large. It doesn’t make sense for Petrobras to have 80% of the oil and gas production capacity. refining in Brazil. The model of concession, of sharing, is not bad. But the PT’s tradition is to use Petrobras to contain inflation and help the “king’s friends”, he said.

Lawyer Rodolfo Viana, specialist in compliancehighlights that Brazil has a remarkable history related to corruption, which puts us in an unfavorable position on the international scene and explains scandals such as the “petrolão” one.

“If we take, for example, the Corruption Perception Index (IPC), we see that Brazil follows a historical line in which the score level is very bad. Brazil reaches less than 40 points, historically, in an index of up to 100 points. This shows that, in general terms and in comparative terms, Brazil is, indeed, a place where there is a high risk of corruption”, said the lawyer.

On the other hand, he claims that Petrobras has changed, which would make new corruption schemes similar to the “petrolão” difficult.

“There is no doubt that Petrobras today is not the same Petrobras from the “petrolão” era. She instituted practices of compliance, governance practices that did not previously exist. In general terms, controls over corrupt practices are stronger than they were before the “petrolão” scandal occurred.

The report contacted Petrobras about the issues raised in the article, but there was no response from the company until the article was published. The space remains open for demonstrations.