February 26, 2014
Samantha Pearson – The Financial Times, 2/26/2014
Petrobras has sliced $16bn off its five-year investment plan, as Brazil’s petrol subsidies have strained the finances of the state-controlled company and turned it into the world’s most indebted oil producer.
The Rio de Janeiro-based company said on Tuesday it would invest $221bn between 2014 and 2018, down from $237bn in its previous five-year plan – one of the world’s largest corporate spending programmes.
The announcement came as the company reported that its net profit had declined to R$6.3bn ($2.7bn) in the final three months of 2013, down 19 per cent from the same period in 2012. Net sales rose 10 per cent to R$81bn from a year earlier.
February 20, 2014
Keith Johnson – Foreign Policy, 2/19/2014
Brazil, the old joke goes, is the country of the future — and always will be. Unfortunately, when it comes to fulfilling the promise of the country’s rich energy resources, the joke rings only too true.
Brazil’s transformation into an energy powerhouse, seemingly so close just a few years ago, has been hobbled by politics. The country’s ability to take advantage of massive offshore oil resources is increasingly questioned, its once-vaunted biofuels industry is reeling, and there are even concerns this year about keeping the lights on and power companies solvent.
There are plenty of things to blame for the hiccups, starting with a severe drought that has hamstrung Brazil’s ability to generate electricity from hydroelectric power, which in turn as led to a spike in fuel imports to run other power plants.
February 6, 2014
Alberto Alerigi & Leonardo Goy – Global Post, 2/5/2014
Brazil’s largest city, Sao Paulo, is on the verge of water rationing because of a severe drought and shortages are seen possible when the country hosts the World Cup soccer tournament in June and July, according to a non-profit group that monitors regional water resources.
An unusually strong high-pressure system over southeast Brazil has blocked the summer rains in recent weeks, causing Sao Paulo’s main reservoir to fall to just 20.9 percent of its capacity as of Wednesday, its lowest level in a decade. January was the hottest month on record in the city and meteorologists expect little rain or relief in the next week.
Some small cities in Sao Paulo state have already seen water shortages and rationing imposed.
February 6, 2014
The Economist, 2/5/2014
ON FEBRUARY 4th your correspondent experienced a power outage which left him stranded in a metro tunnel beneath São Paulo. It appears he was not the only one: 6m people in 11 of Brazil’s 27 states suffered blackouts late in the day after a transmission line between the states of Tocantins and Goiás failed. Operation was restored 38 minutes later but some areas were left without electricity for two hours.
The cause of the outage is unclear. The head of the national-grid operator, Hermes Chipp, ruled out the spike in electricity use in the past weeks as Brazilians fired up air-conditioners to help them cope with the hottest summer since records began in 1946. Inconveniently for President Dilma Rousseff the power cut came on the same day as a government publicity campaign to reassure citizens that Brazil is not facing an electricity crunch.
Specialists have long warned that supply of energy has not kept pace with surging demand. They predict that the risk of electricity shortages this year now tops 20%, well about the 5% the government deems acceptable.
February 5, 2014
Leonardo Goy – Reuters, 2/4/2014
Some of Brazil’s most populous regions suffered sporadic power outages on Tuesday, raising election-year fears of shortages in a country with a long history of blackouts.
The shortages, which occurred during record heat and low reservoir levels at the country’s hydroelectric plants, were caused by short circuits in transmission lines in the north-central state of Tocantins, said Brazil’s national grid operator, ONS.
The outages extended to as many as 6 million consumers and industrial users in Brazil’s biggest cities, usage-heavy regions further south and across parts of the country’s farm belt in the central west.
January 23, 2014
Jeb Blount – Reuters, 1/22/2014
In October 2007, Brazilian President Dilma Rousseff, then chairwoman of state-run petroleum company Petrobras, proudly predicted that giant new offshore oil fields would usher in an age of Brazilian energy independence.
Six years on, the opposite has occurred. Rousseff’s push to develop offshore crude, her fuel-price controls and other energy policies have hobbled the country’s refining sector, robbing it of funds for expansion. As a result, Petroleo Brasileiro SA (PETR4.SA), as Petrobras is formally known, has been forced to look abroad for fuel.
With a dozen decades-old domestic refineries running at what experts say are dangerously high rates to keep pace with expanding demand, Brazil’s cars and trucks are increasingly powered by gasoline and diesel refined in the United States or India. Imports likely reached a record last year, meeting about a fifth of local needs.
January 22, 2014
Alison Sider – Wall Street Journal, 1/21/2014
For the services companies that help drill for oil, the water off Brazil is feeling chilly.
Brazil has been home to some of the largest oil discoveries in recent decades, and oilfield services companies, which provide the equipment and technical know-how to help extract that oil, have bid aggressively to work there. Halliburton Co.HAL +0.38%, one of the largest such companies, has won major contracts with Brazil’s state-run energy giant, Petroleo Brasileiro SAPETR4.BR +2.28%.
But work in new fields has been slower to start up than expected, leaving Halliburton on the hook for high infrastructure and personnel costs that it says are weighing on its otherwise robust earnings. On Tuesday the company reported that its fourth quarter profits rose 19% to $793 million on $7.6 billion in revenue, boosted by growing revenue from the company’s international operations.
January 22, 2014
Luis Vieira – Agriculture.com, 1/21/2014
Kátia Abreu once was listed listed among the top 100 most influential people in Brazil. She is an indepedent senator from the state of Tocantins and president of the Federation of Agriculture and Livestock of Brazil, a counterpart of the National Farmers Union. Being recognized as the rural voice of the country, Abreu joined many fights in order to defend less aggressive regulations that would curb the Brazilian agricultural production. The height of these frictions was when the new Foresting Code was discussed in Brazil. In an UN Conference about climate change in Cancún, Mexico, Greenpeace even delivered a chainsaw to Abreu in an unkind protest.
In an exclusive interview to Agriculture, she chatted about the challenges of Brazilian agriculture. The senator thinks the main challenges to agricultural production in the country are not logistics nor caterpillars, but the next election. Abreu believes that if former Natural Environmental minister Marinal Silva is elected vice-president, Brazilian farmers would be hurt by aggressive environmental regulations pushed by international NGOs.
January 7, 2014
Jeff Fick – The Wall Street Journal, 01/06/2014
Brazil’s state-owned energy giant has suffered a series of industrial accidents in recent weeks as it strives to meet the country’s growing fuel needs.
Petróleo Brasileiro’s most recent accident set a fuel refinery ablaze outside Rio de Janeiro on Saturday. No one was injured in that event, but workers have suffered burns and other injuries in incidents at the same refinery and others, union officials say.
Petrobras, as the company is known, has pushed its refineries to their limits, union officials and industry experts say, in an effort to reduce expensive fuel imports that have eroded the company’s profits and Brazil’s trade surplus in recent years.
January 7, 2014
Juan Forero – The Washington Post, 01/06/2014
When fields said to hold billions of barrels of oil were discovered off the coast here, exuberant government officials said the deep-sea prize would turn Brazil into a major energy player.
More than six years later, the outlook for Brazil’s oil industry, much like the Brazilian economy itself, is more sobering. Oil production is stagnant, the state-controlled oil company, Petrobras, is hobbled by debt, and foreign oil companies are wary of investing here.
“It’s funny, a few years ago, everybody loved Brazil,” said Roger Tissot, a longtime consultant on Latin American energy. “And now it seems the love is gone.”