Brazil Does Not Deserve to Be Delayed in Its Growth and Development Due to Measures That Interfere with the Management of a Company Like Petrobras

Protect Some Jobs in Unattractive Activities or Develop the Country? Asks INOG Researcher Cleveland M. Jones

As a respected media outlet, we at Click Oil and Gas defend democracy and give space to various points of view. Based on this premise, we decided to publish the opinion of the INOG researcher – National Institute of Oil and Gas/CNPq, Cleveland M. Jones, in response to the article we published last Wednesday (07/21) Million-Dollar Bid Makes Petrobras, Brazil’s Largest Oil Company, Give Up the Papa-Terra Oil Field and Further Reduce Its Presence in the Campos Basin.

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Jobs: We Need to Understand What Is at Stake

According to Dr. Cleveland M. Jones’s opinion, “whenever we hear criticism of Petrobras’s divestments because they will result in job losses, we need to understand what is at stake. Do we want Petrobras to continue as a jobs program, both for political appointees and for employees in activities with relatively little commercial attractiveness, or do we want it to remain on the path of becoming one of the largest companies in the sector globally, generating more and more production, profits, wealth, and benefits, as well as pride for Brazil and Brazilians,” states the executive.

If the criterion for evaluating its activities is merely job creation, ANP or some other government agency could require the hiring of employees to be alongside each staff member, even if it was for doing nothing. This is how many railways in the USA were operated until the rationalization brought about by the search for efficiency and the breaking of nonsensical labor rules that harmed the competitiveness of the economy.

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The pursuit of profit is nothing more than the pursuit of efficiency. It is up to the government to oversee and ensure compliance with the laws, not to demand the continuation of operating assets that are unattractive to the company. If the government lacks the competence to manage the country’s strategic interests and can only do so through Petrobras, it should strive to be more effective in its strategic role. It is solely the government’s responsibility, not the private sector’s, to stimulate job preservation through investments with economic returns below what the private initiative requires.

Let Petrobras Work

Let Petrobras work! Its gains, distributed through the government take, will be much greater than the supposed illusory and fleeting gains of maintaining some jobs in activities that are not of interest to the company. With an undue interference in Petrobras’s business, we will only scare away the investments that Brazil so desperately needs to produce its immense known oil wealth, but which will be difficult to monetize if Brazil does not drastically increase production in the shortest possible time.

Or let us have the courage to embrace explicit interventionism, demanding that the focus of the company be on mature fields that require intensive human resource usage, and let it put aside pre-salt and other more productive plays that proportionally employ fewer staff.

In that case, we would also need the courage to fully nationalize Petrobras, something not unthinkable, but that can be done transparently and within market rules. Unfortunately, Brazil does not have the funds to fairly indemnify minority shareholders, nor could it endure long before its O&G sector, entirely in the hands of incompetent and uncommitted managers, falls into yet another mess.

Brazil does not deserve to be delayed in its growth and development by measures that interfere with the management of a company like Petrobras, which is recognized for its competence in its field, and with professional and more transparent management, especially now, when it begins to reap the results of a new era, free from the shackles imposed by corruption and political intervention endured in the past.

by – Cleveland M. Jones

About Cleveland M. Jones

Prof. Cleveland M. Jones, DSc
Technical Director and Partner – Fronteira Energia Ltda. (Fronteira Brasil)
Associate Consultant – CEGeo
Researcher at INOG – National Institute of Oil and Gas/CNPq
Member, Geosciences Advisory Board – NXT Energy Solutions
President, Brazilian Environmentalist Academy of Letters – ABAL
Member, Brazilian Society for the Advancement of Science
Chico Mendes Award, City Hall of Petrópolis, 2019

• LinkedIn: www.linkedin.com/in/clevelandmjones
• Lattes: http://lattes.cnpq.br/2858652663353677