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Bolsonaro wants to privatize Petrobras

:Andrei Morais / Shutterstock

Jair Bolsonaro

 

By Ricardo Brito and Gabriel Araujo / Reuters

BRASILIA / SAO PAULO
Petroleumworld 10 15 2021

Brazilian President Jair Bolsonaro, frustrated that he has been blamed for rising fuel prices, is inclined to privatize oil company Petrobras (PETR4.SA), said he said on Thursday, adding that he would discuss the idea with economic advisers.

“Now I want to privatize Petrobras. … I’ll check with the economic team what we can do about it. Since I can’t control the company, I can’t direct fuel prices, but when it goes up it’s my fault , “Bolsonaro said in a radio interview.

On Wednesday, Economy Minister Paulo Guedes suggested that the government could sell part of its management stake to the company -managed stake to fund welfare programs.

Petrobras has become a hot political topic as energy costs have pushed Brazil’s consumer inflation into double digits, hurting Bolsonaro’s popularity ahead of next year’s presidential election.

Right -wing populists opposed the privatization of Petrobras, calling it “strategic” for Brazil’s national interest. Yet even with its support, some market participants believe that a privatization process can be difficult because it will involve a wider range of stakeholders.

Bolsonaro was elected in 2018 and at the time supported Guedes ’privatization agenda, but has so far sold a limited number of state -owned companies.

Petrobras ’former fuel distribution subsidiary BR Distribuidora (BRDT3.SA), currently known as Vibra, was privatized in 2019. The state -run power company is expected to go through a capitalization round in early 2022. Eletrobras (ELET6.SA).

After urging Petrobras executives to keep prices in recent years, Bolsonaro said he respects the company’s independent pricing policy, rather than urging state tax reforms to bring down prices.

Ilan Arbetman, an analyst at Ativa Investimentos, said a potential privatization process would need to be carefully considered, noting that a model for the sale of Eletrobras had been discussed for a long time until it was fixed earlier. this year.

“When we talk about the privatization of Petrobras, we have to be careful, because it’s a vast process that involves a lot of stakeholders. Right now it’s being weighed-even more on the president’s inclination,” he said. by Arbetman.

Preferred shares in Petroleo Brasileiro SA, as the company formally acknowledges, jumped after Bolsonaro’s comments, rising nearly 2% before gaining about 1% in morning trading.


_____________

Reporting by Ricardo Brito and Gabriel Araujo; Editing by Brad Haynes and David Gregorio from Reuters.

reuters.com /10 14 2021

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