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Former minister Adolfo Sachsida reveals that Petrobras would be on the way to privatization if Jair Bolsonaro had won a second term.
At a decisive moment for the Brazilian economy, Adolfo Sachsida, former Minister of Mines and Energy (MME) during the mandate of Jair Bolsonaro (PL), reveals that the Petrobras was on track to be privatized if Bolsonaro had secured a second term. The strategic plan involved the sale of the state-owned oil giant within a maximum period of a year and a half after re-election.
Restructuring Petrobras: Competition and Privatization
The proposed privatization model sought to encourage competition in the Brazilian oil sector and expand the performance of Pré-Sal Petróleo S/A (PPSA), already in an advanced stage of its privatization process. The proposed law, which aimed to privatize Petrobras, would have actually sent Congress a 30-year future sales offer, with the potential to yield approximately R$390 billion.
Considerations for the sale of Petrobras emerged amid discussions about the rise in fuel prices around May of the previous year. For Sachsida, creating market competition through the privatization of the state-owned company was one of the few solutions to alleviate the high price.
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The words of former President Bolsonaro
Sachsida recalls in an interview with the newspaper O Estado de São Paulo the permission given by the former president Bolsonaro to proceed with privatization studies: “He promptly said: 'go ahead'”. With this support, the then minister began the discussions and studies needed to transform the state-owned company into a private company.
However, with the change of government, the scenario changed dramatically. President Lula (PT) ordered the removal of Petrobras and several other companies, including Correios and Serpro, from the Investment Partnership Program (PPI).
Threat of increased debt
Adolfo Sachsida warns of the potential financial risk that this reversal could represent for Petrobras. The company's withdrawal from the PPI and the discontinuation of the "import parity price"” could result in an “excessive increase” in the company's debt, negatively impacting its profitability and dividends.
For Sachsida, the best option for the country would be “to deconcentrate the sector, introduce competition and reduce State intervention in the economy”, in clear criticism of the possible return on investment in refineries. He concludes: “The current government is not only contesting the agreement with Cade, but also intends to build new refineries. I respect those ideas, but I disagree with them.”
