Bolsonaro Government Evaluates Share Conversion Modeling for Petrobras Privatization Project, Aiming to Dilute Union's Stake

Bolsonaro Government Evaluates Share Conversion Modeling for Petrobras Privatization Project, Aiming to Dilute Union’s Stake

Written by Ruth Rodrigues

Published on 21/06/2022 at 09:22

Foto: Agência Petrobras/Divulgação

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After yet another fuel price adjustment announced by Petrobras last Friday (06/17), allies of the Bolsonaro government are evaluating a possible viable modeling for the privatization project of the company. The model would be share conversion, in which the Union would have its entire participation fully transferred to private initiative, thus ensuring a quicker dilution of shares, aiming to make the privatization process faster in the coming years.

Share Conversion Modeling for Petrobras Privatization May Be the New Strategy of the Bolsonaro Government to Dilute the Union’s Participation in the State-Owned Company

The past few weeks have been highly unstable for Petrobras in the national market due to various factors such as the drop in the supply of Bolivian natural gas, internal leadership changes, and, mainly, the consequences of the new fuel price adjustment announced last week. Thus, the company has rendered its scenario in the current market increasingly unstable and complicated amid an election year.

Due to internal crises and decisions made by the state-owned company, the Bolsonaro government now sees a great political moment to continue with the privatization project of the company, with share conversion modeling being the main alternative currently.

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Bolsonaro Government May Face Difficulty in Advancing Share Conversion for the State-Owned Company’s Privatization Project

Although share conversion is currently the most viable model for the Petrobras privatization project, focusing on diluting the Union’s participation in the company, this is still a risky move at this moment.

This is because the oil energy sector believes it will be difficult for the Bolsonaro government to obtain the necessary approval in an election year, and President Jair Bolsonaro has already stated that privatization of the company may take up to 4 years to happen.

Additionally, Bolsonaro’s main competitor in the 2022 election, former president Lula, affiliated with the Workers’ Party (PT), has already stated that he does not support any model for the privatization project of the state-owned company, which could further complicate the process if he wins the election.

Despite this, the privatization project continues to advance, especially after Petrobras was included in the PPI (Investment Partnership Program) by the government in early June as a way to strengthen the focus on privatization.

Now, the Bolsonaro government awaits the bill for the share conversion modeling to circulate in the National Congress and receive its vote so that the ministries can continue the Petrobras privatization project in the coming months.

Bolsonaro Government Evaluates Share Conversion Modeling for Petrobras Privatization Project, Aiming to Dilute Union’s Stake

Share Conversion Modeling for Petrobras Privatization May Be the New Strategy of the Bolsonaro Government to Dilute the Union’s Participation in the State-Owned Company

Bolsonaro Government May Face Difficulty in Advancing Share Conversion for the State-Owned Company’s Privatization Project

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Bolsonaro Government Evaluates Share Conversion Modeling for Petrobras Privatization Project, Aiming to Dilute Union’s Stake

With an Increasingly Unstable Internal Scenario at the State-Owned Company, the Bolsonaro Government Is Now Studying the Possibility of the Privatization Project for Petrobras Through the Modeling of Share Conversion as a Way to Dilute the Union’s Participation in the Company.

Share Conversion Modeling for Petrobras Privatization May Be the New Strategy of the Bolsonaro Government to Dilute the Union’s Participation in the State-Owned Company

Bolsonaro Government May Face Difficulty in Advancing Share Conversion for the State-Owned Company’s Privatization Project

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