Brazil’s Mantega rules out gasoline price rise

Reuters, 05/15/2012

Brazil’s government-controlled prices for gasoline will not be raised even after the country’s currency hit its weakest level since 2009, Finance Minister Guido Mantega said on Tuesday.

“There will be no (price) hikes,” Mantega told reporters as he arrived at the ministry’s offices in Brasília.

Brazil’s state-run oil company Petrobras has been importing gasoline and diesel at international prices and selling the fuels at a loss on the local market, where the government controls prices.

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Brazil unveils social programme for low-income families

BBC, 05/14/2012.

Brazilian President Dilma Rousseff has launched a raft of social programmes for low-income families with young children.

Ms Rousseff said she would expand the popular social programme Bolsa Familia created by her predecessor Luiz Inacio Lula da Silva.

Families with children under six living in extreme poverty will get $35 (£22) a month for each family member.

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Push for ethanol sours in Brazil amid low sugar prices

Leslie Josephs – The Wall Street Journal/Dow Jones Newswires, 05/13/2012

Sugar prices near 20-month lows have raised questions over Brazil’s future as a leader in both the sugar and ethanol industries.

The South American nation is the largest grower of sugar cane, which can be used to make sugar or ethanol from fermented sugar-cane juice. Its cane fields are growing old, and Brazil is grappling with how to reinvigorate them amid low prices and years of neglect in the wake of the 2008 financial crisis.

The industry is also trying to plot a course for ethanol production at a time when Brazil’s government—which determines how much ethanol is used in ethanol-gasoline blends and whose state-controlled oil company Petróleo Brasileiro SA,PBR -2.80% controls gasoline prices—is focusing attention on large offshore oil reserves.

How Brazil is making an example of Chevron

Paul M. Barrett, Peter Millard – Bloomberg Businessweek, 05/10/2012

Last Nov. 7 something went wrong at a deep-sea oil well operated by Chevron (CVX) 230 miles northeast of Rio de Janeiro. As a massive drill bit punctured reservoir N560, roughly 3,500 feet beneath the ocean floor, monitors revealed pressure much higher than technicians expected. The next day a routine flyover of the field, called Frade, in the Campos Basin, revealed oil on the water’s surface.

Chevron dispatched remote-controlled submarines, which found oil seeping through fissures on the sea floor directly above N560. The blowout preventer, a three-story-tall valve assembly, automatically cut off oil flow at the wellhead. This would not become another BP (BP)disaster, in which the blowout preventer notoriously failed. Still, George Buck, president of Chevron’s Brazil subsidiary, ordered the Frade well shut down. Chevron sent 18 vessels in rotation to contain the oil on the surface, and it readied pyramid-shaped steel caps to cover the seepage points. Workers completed the job in just four days. Buck saw the situation as under control. And technically, it was.

A petroleum engineer in his mid-forties, Buck has an MBA and has worked for Chevron for 23 years. He is 6-foot-5, slender, soft-spoken, and earnest to the point of social awkwardness. He arrived in Brazil in 2009, having worked from Alaska to Texas to Indonesia. He lives with his family in Rio’s fashionable Ipanema beach district. He is not a man about town. After three years in Brazil, he speaks little Portuguese, relying heavily on translators. Nevertheless, on the Frade spill, Buck thought he had made himself quite clear. “Chevron takes full responsibility for this incident,” he said at a press conference in Rio on Nov. 21. At a congressional hearing in Brasília two days later, he added, “Sincere apologies to the Brazilian people and the Brazilian government.”

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Brazil’s $2billion cane revival plan fails: commodities

Stephan Nielsen – Bloomberg, 05/10/2012

Brazil’s 4 billion-real ($2.1 billion) drive to revive sugar-cane production has faltered as government bureaucracy and a curb on foreign loans choked credit needed to finance planting.

Cane refiners, who also grow the crop, couldn’t complete paperwork in time to qualify for loans from the state development bank known as BNDES before the main planting season ended last month, said Maurilio Biagi Filho, president of the ethanol producer Grupo Maubisa. In March, the government imposed a tax on overseas borrowing to stifle capital inflows that are boosting the currency.

The shortage of credit dried up funds for replacing older sugar-cane stalks, which must be renewed every five years to maintain yields. At least eight of the nation’s 420 processing mills are idle because of a lack of cane, threatening Brazil’s lead over the U.S. as the biggest ethanol exporter. Brazil is the world’s largest sugar producer.

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Brazil shelves plans to build new nuclear plants

AFP, 05/09/2012

Brazil said Wednesday it has shelved plans to build new nuclear power stations in the coming years in the wake of last year’s Fukushima disaster in Japan.

The previous government led by former president Luiz Inacio Lula da Silva had planned to construct between four and eight new nuclear plants through 2030.

But the energy ministry’s executive secretary, Marcio Zimmermann, was quoted as telling a forum Tuesday that there was no need for new nuclear facilities for the next 10 years.

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Amid Brazil’s rush to develop, workers resist

Simon Romero – The New York Times, 05/05/2012

The revolt here on the banks of the Madeira River, the Amazon’s largest tributary, flared after sunset. At the simmering end of a 26-day strike by 17,000 workers last month, a faction of laborers who were furious over wages and living conditions began setting fire to the construction site at the Jirau Dam.

Throughout the night, they burned more than 30 structures to the ground and looted company stores, capturing the mayhem on their own cellphone cameras, before firefighters extinguished the blazes. The authorities in Brasília flew in hundreds of troops from an elite force to quell the unrest.

Men in camouflage fatigues still patrol the sprawling work site, reflecting a dilemma for Brazil’s leaders. Even as they move to tap one of the world’s last great reserves of hydroelectric power, the Amazon basin, strikes and worker uprisings at the biggest projects are producing delays and cost overruns.

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Brazil’s Africa relations now strategic: minister

Diana Kinch – Market Watch/The Wall Street Journal, 05/03/2012

Economic and political ties with African countries have become “strategic” for Brazil, Fernando Pimentel, the country’s development, trade and industry minister said Thursday.

Former President Luiz Inacio Lula da Silva recognized the importance of forging closer links with Africa, and current President Dilma Rousseff has visited Africa to cement ties, Pimentel said during a seminar on investment opportunities in Africa in Rio de Janeiro.

In Africa, Mozambique currently attracts the most Brazilian investment, with mining company Vale SA (VALE, VALE5.BR) planning to spend about $8.2 billion in coal mining and rail facilities, while Ghana is another important investment destination for Brazilian capital, Pimentel said.

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Brazil sending more troops to guard Amazon borders

Simon Romero – The New York Times, 05/03/2012

Brazil is deploying more than 8,500 troops to the far reaches of the Amazon rain forest this month in an operation aimed at cracking down on drug smuggling, gold mining and illegal deforestation, officials said.

The troop mobilization sends a clear message ahead of the United Nations Conference on Sustainable Development, which is scheduled to take place here in June, that Brazil is taking steps to assert greater control over its porous frontiers in the Amazon. Soldiers are being sent to border areas near Venezuela, Suriname, French Guiana and Guyana.

“The Amazon is Brazil’s No. 1 priority from a strategic viewpoint, given its importance to humanity as a source of water, biodiversity and food production,” Gen. Eduardo Dias da Costa Villas Boas, chief of the Amazon Military Command, said in a telephone interview.

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BG Group to sell stake in Brazilian pipeline operator for $1.8 billion

Mark Scott – Dealbook, 05/03/2012

The British oil and gas company BG Group agreed on Thursday to sell its 60 percent stake in a Brazilian gas distribution company for $1.8 billion to Cosan, a local sugar and ethanol producer.

The BG Group’s decision to sell its stake in Comgás, Brazil’s largest gas distribution company, comes after the British company announced plans earlier this year to sell $5 billion worth of assets over the next two years.

The disposals would free up cash to invest in the company’s continuing energy exploration projects around the globe, the BG Group said in February.

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