Category: Brazil

SÃO PAULO—Monday’s massive blackout is raising concerns that electricity rationing may hit Brazil this year, dealing a potentially serious blow to the nation’s already fragile economy. Energy officials blamed soaring summer demand and a transmission glitch for Monday’s outage , which rolled through the capital Brasília and 11 states, including São Paulo and Rio de Janeiro. But power woes in Brazil, which is suffering from a severe, multiyear drought, won’t be easily solved, according to Mário Veiga, president of PSR Consultoria, an energy consulting group in Rio de Janeiro. He said Brazilian authorities have exacerbated the current crisis by not pressuring consumers to reduce energy consumption sooner. “The problems occurred because the [federal] government did nothing to avoid this situation,” Mr. Veiga said. Mr. Veiga estimated that there is now a 30% chance that Brazil’s southeast, the country’s richest and most populous region, will face energy rationing in coming […]

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Source: U.S. Energy Information Administration, Agência Nacional do Petróleo, Gás Natural e Biocombustíveis In 2013, Brazil produced 2.0 million barrels per day (bbl/d) of crude oil and nearly one trillion cubic feet (Tcf) of gross natural gas. Within these figures, the share of production from presalt resources found under thick layers of salt thousands of feet below the ocean’s surface remains small but continues to increase. Crude oil production from the presalt layer was 15% of total production in 2013, a significant increase from 0.4% of total production in 2008 when oil from the presalt was first produced. Similarly, Brazil’s presalt natural gas production represents 14% of total production, up from 0.5% of total production in 2008. Exploration and development of Brazil’s presalt layer began in and around the Tupi field almost a decade ago, with first production in 2008. Further exploration showed hydrocarbon deposits in the presalt layer […]

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RIO DE JANEIRO/BRASILIA (Reuters) – When federal investigators first identified signs of corruption at Petrobras in 2009, Dilma Rousseff insisted Brazil’s state-run oil company had nothing to hide. "Petrobras has one of the most accurate accounting standards in the world," said Rousseff, who was then chairwoman of its board and is now Brazil’s president. "If it wasn’t the case, investors would not be seeking out the company as one of the great investment targets." Today, it’s clear her confidence was misplaced. Petrobras now acknowledges it overpaid on contracts for years. Prosecutors say engineering firms paid bribes to win Petrobras contracts, systematically overcharged it to the tune of billions of dollars and funneled a cut of the money to corrupt executives, vendors and political parties, including Rousseff’s ruling Workers’ Party. A Reuters review of a 2009 federal investigation of Petrobras, and interviews with those who conducted it, indicates Rousseff missed […]

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Brazil said it’s moving toward limiting fossil-fuel pollution as part of a global deal on climate change, making it the latest major developing nation to indicate it’s ready to set an emission goal. Brazil’s government is considering three options for targets that would restrain the carbon dioxide produced and has made a proposal to the United Nations about how such measures could apply in other countries, said Antonio Marcondes, the country’s ambassador to a UN conference on climate change. “We are in the process of determining our national contribution to the process,” Marcondes said yesterday at a press conference at the talks in Lima. His remarks add momentum to bring developing countries led by China, India and Brazil into a global deal that would limit greenhouse gases in all nations rich and poor alike. Previous agreements like the 1997 Kyoto Protocol required cuts from industrialized nations but not developing […]

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SÃO PAULO—A corruption investigation involving Brazilian state-controlled energy firm Petroleo Brasileiro SA is now being viewed as a liability to investors, who just a few months ago snapped up some of the company’s shares in the wake of the scandal. Petrobras confirmed this week it is being investigated by the U.S. Securities and Exchange Commission in relation to Brazilian prosecutors’ allegations that it was at the heart of a vast money-laundering and kickback scheme. The share price has dropped more than 40% since hitting an 18-month high in early September, and the company delayed its third-quarter earnings report because of auditors’ doubts. “No one knows how big the hole is (in the company’s numbers),” said Carlos Gribel, head of fixed income at Andbank Brokerage in Miami. “A lot of people think that worse things could start to come out.” According to prosecutors and suspects arrested in the case, a […]

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RIO DE JANEIRO — Paulo Roberto Costa was living an oilman’s dream. He had a house in a luxurious gated community here. He bought a yacht and drove an armored Range Rover. He had more than $25 million stashed in bank accounts in Switzerland and the Cayman Islands. But that dream evaporated recently when the police arrested Mr. Costa and charged him with orchestrating a bribery scheme on an epic scale at Petrobras, Brazil ’s national oil company, and funneling the proceeds to the governing Workers Party and its allies while enriching himself. The case has presented a major challenge to President Dilma Rousseff , who is in a bitter re-election fight against Aécio Neves, a centrist who has been gaining momentum as the vote next Sunday approaches. With the two candidates battling each other for the lead in opinion polls, Mr. Neves is seizing on the oil scandal […]

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Chief Executive Officer Maria das Gracas Foster has told Brazil Finance Minister , who chairs the state-run oil producer, that it needs at least a 10 percent increase in fuel prices, said a person with direct knowledge of the talks. Foster said at a recent board meeting that the gasoline and diesel increase is needed to reduce the cost of subsidizing fuel imports, the person said, asking not to be identified because the discussions are private. Foster also said a 10 percent rise wouldn’t be enough to completely eliminate subsidies or reduce the debt-to-equity ratio, or leverage, to an internal target of 35 percent by year-end, the person said. A weaker Brazilian real compared with the has increased the cost of importing gasoline and diesel and put a strain on the Rio de Janeiro-based company’s , the person said. It’s the first time this year Foster has specified the […]

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Petroleo Brasileiro SA (PETR4) fell the most in almost six years as President Dilma Rousseff gained support in a voter poll, sinking wagers that a new government will reduce intervention in the state-owned oil company . Shares of Petrobras slumped 11 percent to 18.60 reais at the close of trading in Sao Paulo , the biggest decline since November 2008. That loss contributed the most to the 4.5 percent drop in the benchmark Ibovespa today. Rio de Janeiro-based Petrobras had gained 95 percent from its lowest level this year in March through Sept. 2 as support for opposition candidate Marina Silva increased. “There was a moment in the past weeks when a victory by the opposition was almost a certain thing, but this expectation seems now more and more distant,” Marcelo Varejao, an analyst at the brokerage firm Socopa, said in a phone interview from Sao Paulo. “The way […]

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Petroleo Brasileiro SA (PBR) requested access to a former executive’s allegations of a kickback scheme involving the state-run oil producer in a scandal that threatens to influence the outcome of presidential elections. Petrobras, as the Rio de Janeiro-based company is known, asked the judge investigating the so-called Car Wash money-laundering case for details of testimony given by former refining head Paulo Roberto Costa, it said yesterday in a statement. The oil producer also wrote to companies cited by Brazilian press as allegedly involved in kickbacks, Petrobras said, without identifying them. Veja magazine reported over the weekend that a group of more than 30 politicians, including members and allies of President Dilma Rousseff’s Workers’ Party, allegedly received bribes linked to Petrobras contracts. The Sao Paulo-based magazine said the list of names was given by Costa during testimony to the federal public prosecutor. Costa, who is in jail as the police […]

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Oil services company Wood Group Kenny said Tuesday it secured more than $2 million in contracts for work off the coast of Brazil from Petrobras. Program director Hugues Corrignan said the company has a strong relationship with Brazilian energy company Petrobras, a relationship strengthened by new contracts. "We are particularly pleased to be selected to support Petrobras in these challenging projects and have the opportunity to positively contribute to the introduction of innovative technologies in the Brazilian environment," he said in a statement. Wood Group Kenny said it would help Petrobras and its partners develop heated pipeline technology for oil deposits trapped beneath a thick layer of submarine salt, dubbed pre-salt. The oil services company said the technology would be the first ever in a pre-salt environment. The technology targets the Lapa field, located about 170 miles off the coast of Rio de Janeiro. Petrobras in December said the […]

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