Petrobras denies the government has any privatization plan

Petrobras workers demonstrate against the company's privatization. Photo: Gibran Mendes/SindiPetro PR/SC /CUT-PR
Petrobras workers demonstrate against the company’s privatization. Photo: Gibran Mendes/SindiPetro PR/SC /CUT-PR

In a statement, Brazil’s oil and gas giant Petrobras told investors that the Brazilian government has no plan to abandon its role as the company’s controlling shareholder. 

After consulting with the Mines and Energy Ministry — as well as the Economy Ministry — the company said that “there is no relevant fact to be communicated to the market by the [federal government] at this time or recommendation of inclusion of Petrobras destatization in the investment partnership program.”

In recent weeks, President Jair Bolsonaro said on multiple occasions that he wants to hand Petrobras over to private control in order to avoid backlash from rising fuel prices. He was backed by Economy Minister Paulo Guedes. We explained to our premium subscribers in the October 26 issue of the Brazil Daily newsletter that there was little substance in privatization talks.

Every time these supposed plans emerged, shares of the company went up. On October 27, The Brazilian Report revealed that Brazil’s Securities Commission had opened an investigation into suspicions of insider trading. A few risky operations bet on the rapid rise of Petrobras’ shares right before the government vented the idea of privatization. These investors made massive gains, raising eyebrows.

After the company’s statement, its stocks took a nosedive — from BRL 26.26 at 11:10 am to BRL 25.86 at noon.