Ten years after the initial signs of major scandals involving Petrobras executives in 2014, the lesson has not been learned in Brazil. In 2024, we still find ourselves amid debates and disputes, albeit discreet, between President Lula and Petrobras CEO Jean Paul Prates regarding the company’s astronomical figures.
The current controversy between the president and the Petrobras CEO revolves around the distribution of either 80 billion or 45 billion reais among the state-owned company’s shareholders. Despite all the abuses during the Lava Jato operation, the main lesson learned was that political leaders do not act in the interests of the state company and its shareholders, but rather for political and partisan interests—if not personal one.
As the newest member of OPEC, Brazil should seize the favorable conditions to open up the market and boost productivity. Keeping Petrobras as a state-controlled entity only makes us vulnerable to future scandals like Lava Jato or, at the very least, to petty conflicts like the one we’re currently witnessing between Lula and Prates. The state’s role should be to ensure that the country’s energy potential is fully exploited—regardless of the nationality or ownership of the operators.
Petrobras, once the largest company in Latin America, has accumulated extensive experience and knowledge of Brazilian oil fields. If privatized and placed in an open market, the company would be capable of absorbing all the specialized labor in Brazil, maintaining, and even expanding, the level of expertise and technical quality that has made it a global reference in the energy sector.
The market is the best mechanism to assess society’s energy needs. Leaving these decisions to political parties can have serious consequences. The classic example is Venezuela—a country with the largest oil reserves, but without the potential for exploitation due to a closed market and state monopoly.
The situation in our neighboring country serves as a warning about the dangers of poorly conceived public policies and the inefficient management of natural resources. The closed-market policies, coupled with the near-exclusive exploitation by the state-owned company PDVSA, led to an overdependence on oil and a lack of economic diversification.
The result is long lines of cars waiting for hours to refuel, reflecting the fuel shortages and chaos that plague the country. This situation serves as a reminder of the dangers of keeping a single state-owned company as the dominant player in a crucial market, highlighting the importance of policies that promote competition, transparency, and efficiency to ensure a nation’s economic and social well-being.
In an ideal world, Jean Paul Prates could be making decisions about dividend distribution at any other private oil company operating in Brazil, without political interference—assuming he were indeed a competent manager chosen by them for the job. Meanwhile, President Lula could focus on health, education, and security in the country.
In the post-Lava Jato scenario, it is time to finally face reality and seriously consider the privatization of Petrobras. This is not merely a matter of ideology or political preference, but of seeking concrete and effective solutions to the problems we face. Privatizing Petrobras is a step in the right direction to ensure a more prosperous and sustainable future for Brazil.