Brazil oil workers pressuring Petrobras to cancel divestments, retake assets

Bnamericas Published: Tuesday, January 31, 2023

Brazilian oil workers union FNP will pressure state company Petrobras and the government to halt divestments and even backtrack on deals that are already closed, FNP head Eduardo Henrique Costa, told BNamericas. 

During a meeting on Friday with CEO Jean Paul Prates, FNP presented a series of demands, including the end of the fuel import parity price (PPI) policy and retaking assets sold in recent years. 

“Our role now is to work so that we move forward with the effective implementation of the demands, with the establishment of commitments and deadlines,” Costa said. 

One possibility would be to renationalize assets by decree, but Costa said the government, which is Petrobras' majority shareholder, would probably shy away from this option. 

A more viable alternative would be to have the public prosecutor and Petrobras’ legal team question the legality of the sales, indicating, for example, a sale price below market value and "instrumentalized changes in legislation." 

The strategy could be applied to onshore and offshore mature oil and gas fields and refineries sold by Petrobras during the Michel Temer and Jair Bolsonaro administrations, in addition to the company’s former fuel retailer BR Distribuidora, now dubbed Vibra Energia.  

Among the assets for which sale processes could be interrupted are Petrobras’ biofuel subsidiary PBio and the operator of the Bolivia-Brazil gas pipeline TBG

FNP also mentioned the resumption of building offshore platforms locally, the conclusion of construction of the Comperj, Premium I and II and Rnest refineries, and retaking the Bahia and Sergipe fertilizer plants leased to Unigel.

Regarding Petrobras’ fuel pricing policy, the union proposed to de-link it from international prices and create a composition based on local production and refining costs, while taxing crude oil exports. 

Other FNP demands include decreasing the profit margin of Petrobras and private fuel distributors to guarantee fair prices, earmarking part of Petrobras’ profit for the energy transition, and returning to a 100% state-owned company with an oil and gas monopoly. 

Although most of the plans are unlikely to come to fruition, the political juncture is favorable. President Luiz Inácio Lula da Silva is a former union leader, while Jean Paul Prates was a Workers’ Party senator before he took over at Petrobras. 

Both have criticized the fuel price policy, which they deem unfair to the population. 

Other FNP demands such as the resumption of local construction of platforms and refineries and the suspension of divestments that have not been completed, may have a bigger chance of being implemented. 

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