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When its works began during the Lula government, Comperj's objective was to produce around 165 barrels of fuel and boost distribution. Time passed, the works were paralyzed, arrests for Lava Jato were made and many events in the political field of the country interfered in the project.
The Petrochemical Complex of Rio de Janeiro (Comperj), located in the municipality of Itaboraí, in the metropolitan region of the capital of Rio de Janeiro, is considered for its own reasons as the largest Petrobras action and one of the largest undertakings on the planet in the production, refining, marketing sector. and transportation of oil, natural gas and derivatives.
The work was an investment during the then government of President Luiz Inácio Lula da Silva, in 2008, costing around R$ 8,4 billion. Thus, Brazil had a large industrial complex, with the promise of improving the industrial, economic and environmental sector and the fall in fuel prices, as a direct consequence.
However, as many already know and regret, Comperj's works were paralyzed in 2015 with the results of the arrests of Petrobras directors and even the governor of Rio, Sérgio Cabral, through revelations of Operation Lava-Jato that investigated situations of corruption involving the company. The 45 km² undertaking was no longer a priority for Petrobras. The result is that companies contracted directly or indirectly closed their doors and the dream of processing 165 barrels of oil per day at the site was postponed. We've had high fuel prices in a common way until today.
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With the now president Jair Bolsonaro in charge of the Planalto Palace, who has already changed command from Petrobras to try to interfere in fuel price policy, some bidding rounds were restarted. Shortly before, in October 2018, during the Michel Temer government, Petrobras began an attempt to reach an agreement with the China National Oil and Gas Exploration and Development Company (CNODC), a subsidiary of the Chinese oil company CNPC, to conclude the refinery of the Comperj. The initial agreement provided the Chinese company with 20% of the refinery. Petrobras called the negotiation at the time a 'strategic partnership', and Lula, who encouraged the creation of the complex, said that they would be giving Comperj almost for free to the Chinese. In 2019, the negotiation ended without an agreement.
Comperj had more than thirty thousand male and female workers. Currently only 600 would be carrying out maintenance services on site. In 2017, even against members of his party and while enjoying the last moments of freedom, former President Lula paid a visit to the city of Itaboraí. On the occasion, Lula gathered former workers from the region and criticized what he called the abandonment of the complex. The project was conceived, in his words, as a “mixture of a refinery and a petrochemical industry”.
Is the resumption of Comperj by Petrobras proof that Lula is innocent?
Enthusiast of labor causes, the former PT president understands that Comperj is still important for the economic growth of the entire region. In addition to direct jobs, indirect jobs and projects are envisaged around the complex and throughout the city of Itaboraí and São Gonçalo. The trend, therefore, is that Lula, who had the processes related to the triplex cases in Guarujá (SP) and the site of Atibaia (SP) annulled and who believes that the conduct of Operation Lava Jato was flawed, invest in the resumption of works of Comperj, in case he is elected president again in 2022.
In addition to this labor issue, it would be proof that Lula believes he is giving Brazil that Petrobras' loss of credibility and the crisis in the sector that affects the entire country would have come from a corrupt police operation with political leanings. Lula wants to prove, in parallel with this possible revival of Comperj, that Lava Jato destroyed companies and generated unemployment for millions of people and that it will manage to lower fuel prices.
Values for investments in the resumption of Comperj are unknown
It is not known how much will still need to be spent for the complex to be completed. According to an analysis by specialists, more than US$ 5,3 billion (17,1 billion in Reais) is needed to complete the construction. According to the Federal Audit Court (TCU), the loss to Petrobras in relation to Comperj is around R$12,5 billion.
Could the resumption of Comperj in the possible Lula government lower fuel prices?
The Petrochemical Complex of Rio de Janeiro (Comperj), a giant undertaking in the history of the petrochemical sector in Brazil, was designed in 2006 (a cornerstone) to be the greatest solution for transforming petrochemical products into consumer goods, such as: components for industries automotive and household appliances, surgical materials, packaging, paints, among others. A true production complex of extraordinary scale.
However, as time passed, this optimistic scenario ceased to exist and Comperj became a monumental center of disorder. With the stoppage of works in 2015, situations were triggered that negatively affected the economy of the sector. This trigger reached the final consumer, with routine increases in fuel prices. The question that Brazilians ask now is: when will the stabilization of fuel prices fall?
In countries with polarized political tastes and internal production power, politics and economics go hand in hand. It is possible that former president Lula will be a candidate again in 2022 and he has already made it clear that one of his actions in the sector is to encourage the recovery works at Comperj. If the complex becomes, in fact, the main player in petrochemical production, there will be an important boost in Brazil's Gross Domestic Product (GDP). And with direct production consolidated, prices at refineries should decrease and thus reach the final fuel consumer (gasoline pumps). Comperj is currently limited to a refinery and a natural gas processing unit (UPGN).
Facilitation of logistics will favor fuel prices
Despite being self-sufficient in oil, Brazil does not have enough processing capacity for the entire territory, so it has to export oil and buy its derivatives, such as fuels such as gasoline and diesel. Comperj, if a large production complex comes into practice, will solve this deficiency and thus, in fact, make Brazil a reference in the sector. Production and logistics, therefore, would be internal and thus trigger the reduction of costs until reaching the pump at the filling stations to the final consumer.
Currently, Brazilian legislation provides for freedom of prices in the fuel market, changes in the final price of the pump depend on transfers made by other components of the fuel sector chain. Until reaching the final consumer, federal and state taxes, acquisition costs, in addition to the mandatory mixture of anhydrous ethanol are added.
Lula says he will reverse Bolsonaro government privatizations to try to lower fuel prices
2022 is a presidential election year. A dispute that already proves to be quite intense, with two opposing sides in public administration ideologies. On the neoliberal side, which is part of President Jair Bolsonaro under the coordination of the Minister of Economy, Paulo Guedes, whose objective is the privatization of dozens of state-owned companies. On the other hand, the pre-candidate and ex-president Lula, who discards the privatization of several public companies. Understand whether it will be possible to reverse privatizations here if Lula is elected in 2022.
By Junior Aguiar – CPG Guest Journalist (Article contains copyright)
