Lula defends investment in refineries

Refineries to integrate with petrochemicals due to weak fuel demand

Former President Luiz Inácio Lula da Silva (Workers’ Party, PT) has suggested changes to Petrobras’s business plan, such as reversing the divestment policy started in 2016, after the impeachment of Dilma Rousseff. He also criticized again the state-owned company’s price policy and defended new investments in refineries.

In a debate organized by his party and the oil workers federation (FUP) in Rio, Mr. Lula da Silva avoided any reckoning of his government. Refineries planned by Petrobras during the Lula da Silva administration were at the center of scandals about embezzlement of state funds that shook the administration of his successor, Ms. Rousseff, and contributed to impeaching her in 2016.

The Abreu e Lima refinery (Rnest), in Pernambuco, was the target of investigations not only of Operation Car Wash, but also of lawsuits in the Securities and Exchange Commission of Brazil (CVM). The unit is now operational and is likely to be finished by Petrobras itself, which was unable to sell the facility. Another project investigated for irregularities under Car Wash was Comperj, a complex of refineries and the current Polo Gaslub, which got off the drawing board with only a fraction of the size initially imagined and today is focused on receiving and processing natural gas from offshore wells.

Encouraged by the fuel crisis that destabilized the command of the company, Mr. Lula da Silva signaled he could expand the oil company’s refining policy again. “This country needs to have new refineries. Or renovate the old, scrapped ones, as we have already done in Paraná and Rio Grande do Sul,” he said. “We need to produce more and improve the quality of the fuel. Brazil needs to be an exporter of oil products,” he added.

Mr. Lula da Silva also said Petrobras must be profitable, and that he never accepted a deficit in the company’s earnings reports when he was the president. He said, however, that profits “must be shared with those who are responsible for the state-owned company” — the population, through affordable prices.

Under the Rousseff administration, Petrobras announced losses of R$23.6 billion in 2014 and R$34.8 billion in 2015 as it had to write off losses caused by corruption.

Mr. Lula da Silva said he preferred not to speak ill of the consultant for not knowing him. But he did not spare him any criticism. “I don’t know this person [Mr. Pires], so I’m not going to speak badly of him. But the two snippets that I read out of the news today say that he is a lobbyist. And that he is much more connected to foreign companies than to ours.” He then indirectly criticized Mr. Pires’s preference for the privatization of assets. He defended “using what is happening today in Petrobras” in the electoral campaign. Mr. Lula da Silva, the leader in the polls, seeks to associate the high prices of gasoline, diesel oil and cooking gas to President Jair Bolsonaro.

With the exception of the governor of São Paulo, João Doria (Social Democratic Party, PSDB), who has made no public comments, the front runners for the presidency have also spoken out about Petrobras. Former minister Ciro Gomes (Democratic Labor Party, PDT) preferred to record a video to say that “the corporate governance of the thievery that Lula implanted in Petrobras” cannot return.

About the subject, former Justice Minister Sérgio Moro (Podemos) said that “our goal is to privatize, as much as possible, all state-owned companies. Petrobras is one of them,” he said. “How do you solve the question of price and product and reduce inflation? It is market competition. So you have a public monopoly, as is practically the case with Petrobras, or you have a private monopoly if you privatize in the wrong way, it won’t solve the problem,” he said.

(Julianna Granjeia contributed to this story.)

Source: Valor International

https://valorinternational.globo.com