Brazil president says to maintain oil rules, national content

Reuters, 05/14/2015

May 14 Brazilian President Dilma Rousseff said on Thursday that her government will maintain rules that mandate production-sharing contracts for the country’s most promising areas and high national content requirements for the oil industry.

“The local content policy is not something that can be set aside, it is central to my policy of reviving our country’s investment capacity,” Rousseff said at the christening of an oil tanker at the Atlântico Sul Shipyard near Recife, Brazil.

“We are going through a period of macroeconomic difficulty, but today things are different because we have these shipyards.”

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Brazil president says to maintain oil rules, national content

Brazil: Oily mess

Joe Leahy – The Financial Times, 05/14/2015

In Brazil’s hyper-consumerist society, people are accustomed to paying for everything in instalments, from fridges and televisions to silicon breast implants. But less commonly known is that even bribes to political parties can allegedly be paid parcelado, as the practice of paying in instalments is called.

That is what Augusto Ribeiro de Mendonça Neto, a former board member of oil and gas services company Toyo Setal, claimed in testimony in March. He alleges that he paid bribes to the ruling centre-left Workers’ party, or PT, between 2010 and 2013 in exchange for winning contracts with state-owned oil company, Petrobras.

The allegations form part of an investigation into a vast corruption scandal at Petrobras known as “car wash”. As part of the probe, Mr Mendonça told prosecutors that João Vaccari Neto, former PT treasurer, asked him to disguise the bribes as payments to a printing and advertising company named Editora Gráfica Atitude.

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Brazil: Oily mess

China to invest $50b in Brazil infrastructure

BBC, 05/15/2015

China is planning to invest up to $50bn (£32bn) in Brazil for new infrastructure projects.

The deal is due to be signed by banks from both countries during a visit by Chinese Prime Minister Li Keqiang to Brazil next week.

The money will go towards building a railway link from Brazil’s Atlantic coast to the Pacific coast of Peru to reduce the cost of exports to China.

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China to invest $50b in Brazil infrastructure

Brazil’s faltering economy needs some tough love

Samantha Pearson – Financial Times, 5/12/2015

For Brazil’s economists, 2015 will certainly be a year to forget. Latin America’s biggest economy is expected to contract by more than 1 per cent this year, marking the country’s worst recession in 25 years.

Meanwhile, inflation is set to end the year above 8 per cent, breaking the target range for the first time since 2003.

To add to the country’s woes, the corruption scandal at state-controlled oil company Petrobras — believed to be the biggest of its kind in Brazilian history — has the potential to slow growth further and accelerate job losses.

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Brazil’s faltering economy needs some tough love

Brazil Witness Alleges Politicians Knew About Alleged Petrobras Scheme

Luciana Magalhaes and Will Connors – The Wall Street Journal, 5/11/2015

CURITIBA, Brazil—A convicted money launderer at the heart of an investigation into an alleged corruption scheme at Brazil’s state-run oil company Petroleo Brasileiro SA alleged President Dilma Rousseff and former President Luiz Inácio Lula da Silva knew about the alleged scheme.

Alberto Youssef, a currency dealer who was convicted of money laundering and sentenced last month to three years in prison, made the allegations to a congressional commission investigating the alleged corruption at Petrobras. Mr. Youssef had previously made the allegations to investigators as part of a plea deal for a lesser sentence.

When asked by lawmakers Monday if Ms. Rousseff and Mr. Lula da Silva, along with other top government officials, knew of the alleged scheme, Mr. Youssef said, “It is my understanding that [they] knew everything.”

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Brazil Witness Alleges Politicians Knew About Alleged Petrobras Scheme

The Betrayal of Brazil

Michael Smith, Sabrina Valle, Blake Schmidt – BloombergBusiness, 05/08/2015

In mid-2013, Brazilian federal police investigator Erika Mialik Marena noticed something strange.

Alberto Youssef, suspected of running an illicit black-market bank for the rich, had paid 250,000 reais (about $125,000 at the time) for a Land Rover. The black Evoque SUV ended up as a gift for Paulo Roberto Costa, formerly a division manager at Brazil’s national oil company, Petrobras. “We were investigating a money-laundering case, and Petrobras wasn’t our target at all,” says Marena. “Paulo was just another client of his. So we started to ask, ‘Why is he getting an expensive car from a money launderer? Who is that guy?’”

Marena had spent the previous decade building cases against money launderers, and Youssef had been a perennial target. He’d been arrested at least nine times for using private jets, armored cars, clandestine pickups by bagmen, and a web of front companies to move illicit cash. But Youssef had been spared serious jail time by testifying repeatedly against other doleiros, Brazilian slang for specialists in laundering unreported cash.

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The Betrayal of Brazil

Venture Capital Heads to Brazil, Defying Economic Slump

Jonathan Levin – Bloomberg Business, 5/4/2015

To understand the venture capital scene in Brazil, follow the smartphones — not the economy.

That’s the message from Doug Leone, a partner at Sequoia Capital, an early investor in both Google Inc. and LinkedIn Corp. His firm committed funds last year to Sao Paulo-based Nubank, a technology-based financial-services company.

Local startups are reaping the benefits of a global venture capital community that’s hunting for markets with large, uptapped bases of Internet-using consumers. The current economic malaise aside, Brazil fits the bill: Tens of millions of people joined the middle class during a decade-long commodities boom.

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Venture Capital Heads to Brazil, Defying Economic Slump