Wave of bad news for Petrobras

Remember that Brazilian company that has discovered huge reserves of oil and inaugurated the new frontier of global exploration in deep waters? Remember that Brazilian company that supposedly would take Brazil from its economic past and push the country to become a major world economic power?

Apparently, they’re having a little trouble getting there. We list below some recent news from the Brazilian company that put in doubt its ability to operate as a normal and self-sufficient company. It is important to remember that Petrobras is a government company and as such, efficiency and good administration of public money is not their best skill.

News #1: Brazilian government authorizes Petrobras to continue importing liquefied natural gas (LNG)

The Brazilian government has authorized Petrobras to continue importing liquefied natural gas (LNG) to meet the demand of natural gas in the country. The import volume is 40 million cubic meters. The authorization of the Ministry of Mines and Energy is valid for two years.

Source: http://odia.ig.com.br/portal/economia/governo-autoriza-petrobras-a-importar-g%C3%A1s-natural-para-atender-%C3%A0-demanda-do-pa%C3%ADs-1.542578

Promise: Government had promised that Brazil would be self-sufficient in oil and gas

 

News #2: Engineers complain that Petrobras is “exporting” jobs

It has been increasingly common to hear complaints of Brazilian engineering offices that used to provide services to Petrobras and now are seeing orders stop and consequently dismissing staff. One reason would be the increase of use of engineering service providers from abroad.

According to Petrobras, the company does not have the same experience that demonstrates with oil production in the construction of refining units, for example, hence the need for international partnerships. The justification was rejected by the association of engineers.

Source: http://blogdosakamoto.blogosfera.uol.com.br/2013/02/02/petrobras-esta-exportando-empregos-reclamam-engenheiros/

Promise: Government had promised that the oil and gas sector would generate many jobs for Brazilians and only national content companies would provide services for Petrobras

 

News # 3: Petrobras has delayed payments to suppliers and caused financial difficulties in the chain of service providers

Petrobras has delayed payments to suppliers and caused financial difficulties in the chain of service providers, after adopting a policy to reduce costs amid losses at its Supply division, rising costs and stagnant production.

In a kind of domino effect, service providers also delay its financial commitments. Financial problems have pushed some companies supplying the company, to be reorganized. Large companies such as Lupatech, had to sell assets and raise new capital to avoid the worst.

Source:

http://economia.ig.com.br/empresas/2013-02-02/problemas-de-caixa-da-petrobras-comecam-a-contaminar-parceiros.html

A look at other Brazilian public companies gives an an example of inefficiency and bad services and is an indication of where Petrobras is going.

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Joe Cloud
Dutch, American, Brazilian... lived there for 5 years and owns property in Brazil. Out of the country for a few years now and would like to go back, however current circumstances tell me it's not the right time.