Petróbras: brazilian biggest petroleum company

Petrobras is one of Brazil's largest state-owned companies. The corporation was created

amid years of negotiations and debates over how the government would use the country's

petroleum and resources. The discovery of the pre-salt layer between the coastlines of Santa

Catarina and Espirito Santo significantly boosted Petrobras' output and placed the firm in a

prominent position on the international arena, a turning moment in the history of oil in Brazil.

Petrobras, in addition to its contributions to the petrochemical technology industry, is a major

attractor of international investment, money flow, and job creator. Petrobras is a company of

crucial significance to Brazil since it is responsible for the establishment of one of the world's

largest oil provinces. This essay will focus on the Brazilian petroleum company, Petrobras, and

what the company means to the country.

Petrobras was founded by Getúlio Vargas, the president and later the dictator of Brazil.

Moreover, before Vargas' return to power, President Gaspar Dutra's government encouraged the

involvement of the private sector in international corporations in the country's oil exploration

program where the Petroleum Statute was introduced with the intention of regulating the sector,

however, the document was never submitted. On the contrary, some groups supported the state

oil monopoly. The nationalist organization was the most famous group, they founded the oil

campaign. The campaign was known by the phrase “O petróleo é nosso”, which translates to "the

oil is ours." The action gained widespread support, resulting in the installation of the law in

1953, which established Petrobras as Brazil's first petroleum company (Guitarrara, 2021). It was

at that point on October third, in 1953, where the National Petroleum Policy was signed setting

up the Brazilian monopoly on activities related to research, exploration, refining, and

transportation of raw materials.

 After its involvement in the "Lava Jato" operation, the company's image, which was once

a source of pride for Brazil, was reduced to ashes. The system operated by charging bribes to

smooth conversations between contractors and Petrobras, as well as the collection of bids for

major public works constructions. Additionally, contracts between contractors and other firms

participating in the agreement were overvalued to ease the diversion of public funds, which were

obtained by money changers and other operators in charge of passing it on to politicians and

officials involved in the system (Silva, 2021). The company's scandal has already been voted the

world's second-largest case of corruption by Transparency International, a German-based NGO

that is a reference in the fight against money laundering (Yanukovich, 2016).

Petrobras, which is publically traded on the stock exchange, is majority-owned by the

federal government. The firm is currently in a stable state, its gasoline and diesel import

stockpiles significantly increased in 2021. The rise in imports occurred at the same time as

Petrobras increased production at its refineries. In addition, one of the most recent

accomplishments was the discovery of gas in exploratory fields in the state of Sergipe in 2019.

Despite its successes, since the money laundering case in 2014, the business has been undergoing

a phase of restructuring and reorganization in the transparency establishments in order to recover

trust and respect in the global and national market.

The COVID-19 pandemic had a consequence on almost every sector of the global

economy, which included the petroleum industry. The dispute between the Russians and the

Saudis, which led to the commodities dropping to their lowest average in 18 years, is a crucial

part of this impact (Delgada, 2021). This matter has had a massive effect on Brazil, as the

country is a major exporter, and the price of petroleum directly affects its trade balance and

royalty collection. For now, there is still no understanding between Russia and Saudi Arabia,
however, according to specialists, the expectation is that they finally reach an agreement that will

allow for an increase in prices and give breath to the market. For the time being, there is no

agreement between Russia and Saudi Arabia; yet, experts believe that they will eventually strike

a deal that will allow for price increases and eventually evolve the market.

Owing to the current state of instability, it is uncertain what the company's future holds. It

is expected that the value of petroleum will increase significantly over the years, growing the

company's value. Another expectation is that the government might very well privatize

Petrobras. The Economy Minister of Brazil Paulo Guedes defended the government's decision to

sell Petrobras stocks in order to distribute a part of the profits to the most vulnerable population,

allowing the government to retain control of the state-owned company through a golden share.

The enterprise's strategic plan is a favorable sign, indicating that the company will concentrate

on its main value pillars.

Reference list:

Conteúdo, E. ed., 2021. Petrobras: Importação de Gasolina subiu 950% no 3º trimestre.

Exame. Available at: https://exame.com/negocios/petrobras-importacao-de-gasolina-subiu-

950-no-3o-trimestre/ [Accessed October 21, 2021].

Guitarrara, P., Petrobras: O que É, história, criação, importância. Brasil Escola. Available

at: https://brasilescola.uol.com.br/brasil/a-petrobras.htm [Accessed October 21, 2021].

Reuters, 2021. Guedes Quer Usar Ações da petrobras para distribuir recursos a vulneráveis.

Exame. Available at: https://exame.com/economia/guedes-quer-usar-acoes-da-petrobras-

para-distribuir-recursos-a-vulneraveis/ [Accessed October 21, 2021].

Reuters, 2021. Privatização da Petrobras? Bolsonaro Quer E Avaliará Com Equipe

Econômica A. O. Globo, ed. Exame. Available at:

https://exame.com/economia/privatizacao-da-petrobras-bolsonaro-quer-e-avaliara-com-

equipe-economica/ [Accessed October 21, 2021].

Silva, T.O., Operação Lava Jato. Brasil Escola. Available at:

https://brasilescola.uol.com.br/brasil/operacao-lava-jato.htm [Accessed October 21, 2021].

Yanukovich, V., 2016. Escândalo da Petrobras É eleito o 2º maior caso de corrupção no

Mundo. Jornal Nacional. Available at:

http://g1.globo.com/jornal-nacional/noticia/2016/02/escandalo-da-petrobras-e-eleito-o-2-

maior-caso-de-corrupcao-no-mundo.html [Accessed October 21, 2021].