Petróleo Brasileiro S.A., better known by and trading as the portmanteau Petrobras, is a Brazilian majority state-owned multinational corporation in the petroleum industry, which is headquartered in Rio de Janeiro. The company's name translates to Brazilian Petroleum Corporation.
The company was ranked #71 in the 2023 Fortune Global 500 list.[9] In the 2023 Forbes Global 2000, Petrobras was ranked as the 58th-largest public company in the world.[10]
History
Petrobras was created in 1953 under the government of Brazilian president Getúlio Vargas with the slogan "The Oil is Ours" (Portuguese: "O petróleo é nosso"). It was given a legal monopoly in Brazil.[11] In 1953, Brazil produced only 2,700 barrels of oil per day. In 1961, the company's REDUC refinery began operations near Rio de Janeiro,[12] and in 1963, its Cenpes research center opened in Rio de Janeiro; it remains one of the world's largest centers dedicated to energy research.[13] In 1968, the company established Petrobras Quimica S.A ("Petroquisa"), a subsidiary focused on petrochemicals and the conversion of naphtha into ethene.[14]
Petrobras had begun processing oil shale in 1953, developing the Petrosix technology for extracting oil from oil shale. It began using an industrial-size retort to process shale in the 1990s.[15] In 2006, Petrobras said that their industrial retort could process 260 tonnes/hour of oil shale.[16]
In 1994, Petrobras put the Petrobras 36, the world's largest oil platform, into service. It sank after an explosion in 2001 and was a complete loss.[17] In 1997, the government approved Law N.9.478, which broke Petrobras's monopoly and allowed competition in Brazil's oilfields, and also created the national petroleum agency, Agência Nacional do Petróleo (ANP), responsible for the regulation and supervision of the petroleum industry, and the National Council of Energy Policies, a public agency responsible for developing public energy policy. In 1999, the National Petroleum Agency signed agreements with other companies, ending the company's monopoly.[18]
In 2000, Petrobras set a world record for oil exploration in deep waters, reaching a depth of 1877 m below sea level.[19] In 2002, Petrobras acquired the Argentine company Perez Companc Energía (PECOM Energía S.A.) from the Perez Companc Family Group and its family foundation for $1.18 billion. This acquisition included assets in Argentina, Brazil, Venezuela, Bolivia, Peru, and Ecuador, 1.1 billion barrels of crude oil reserves, and production of 181 e3BOE per day.[20]
In 2005, Petrobras announced a joint venture with Nippon Alcohol Hanbai KK to sell Brazilian ethanol to Japan, called Brazil-Japan Ethanol.[21] On 21 April 2006, the company started production on the P-50 oil platform in the Albacora-Leste oil field at Campos Basin, which made Brazil self-sufficient in oil production.[22] During the administration of the Workers' Party in the 2010s, Petrobras spent an estimated $40 billion subsidizing motor fuels, causing it to become the world's most indebted oil company.[23] By November 2015, the company had accumulated $128 billion in debt, 84% of it denominated in foreign currencies.[24]
In 2022, under the administration of Caio Paes de Andrade, Petrobras achieved its highest net profit in history, totaling R$188.3 billion, distributing R$215.7 billion in dividends, making it the second largest dividend payer in the world.[25]
In summer 2023, Petrobras entered into a 5-year agreement with Weatherford International for providing intervention services offshore Brazil. As part of the cooperation, the US company will also provide digitalization of production using the Centro well construction optimization platform.[26]
Also in 2023, Petrobras announced the resumption of construction of a new production line at the Abreu e Lima refinery in Ipojuca, Pernambuco, Brazil. The initial investment in the refinery is estimated at $18.5 billion, and the refinery will refine heavy crude oil from the Pre-Salt region.[27]
Operations
Business areas
The company operates in six business areas, listed in order of revenue:[2]
- Refining, transportation and marketing – refining, logistics, transportation, trading operations, oil products and crude oil exports and imports and petrochemical investments in Brazil
- Exploration and production – crude oil, natural gas liquids (NGL) and natural gas exploration, development and production in Brazil
- Distribution – distribution of oil products, ethanol, biodiesel and natural gas to wholesalers and through the Petrobras Distribuidora S.A. retail network in Brazil
- Gas and power – transportation and trading of natural gas and LNG, and generation and trading of electric power, and the fertilizer business
- International – exploration and production of oil and gas, refining, transportation and marketing, distribution and gas and power operations outside of Brazil
Corporate affairs
Ownership
The Brazilian government directly owns 54% of Petrobras' common shares with voting rights, while the Brazilian Development Bank and Brazil's Sovereign Wealth Fund (Fundo Soberano) each control 5%, bringing the State's direct and indirect ownership to 64%.[53] The privately held shares are traded on B3, where they are part of the Ibovespa index. It is also listed in the New York Stock Exchange in the form of American depositary receipts and in the Madrid Stock Exchange.
Business trends
The key trends for Petrobras are (as of the financial year ending 31 December):
Social responsibility
Operation Car Wash and related protests in Brazil
Operation Car Wash was a criminal investigation by the Federal Police of Brazil's Curitiba branch. Originally a money laundering investigation, it expanded to cover allegations of corruption at Petrobras, where executives allegedly accepted bribes in return for awarding contracts to construction firms at inflated prices.[60] The aim of the investigation was to ascertain the extent of a money laundering scheme, estimated by the Regional Superintendent of the Federal Police of Paraná State in 2015 at BRL6.4–42.8 billion (US$– billion), largely through the embezzlement of Petrobras funds.[61][62]
The authorities issued over a thousand warrants against business figures and politicians.[63] It also led to a wave of arrests. Fernando Soares, also known as "Fernando Baiano," a businessman and lobbyist, was allegedly the connection between major Brazilian construction firms and the government formed by the Workers’ Party
Environmental record
Petrobras's website notes several initiatives to preserve the environment. These include efforts to support both ocean and forest ecosystems.[79] Most notably, Petrobras has sponsored population studies and conservation efforts for humpback whales in northeast Brazil. The company's efforts helped to rebuild Brazil's humpback whale populations from 2,000 in the mid-nineties to over 9,000 in 2008.[80]
Petrobras subscribes to the United Nations Global Compact, a voluntary agreement regarding human rights, working conditions, corruption, and the environment.[81]
In 2008, the Spanish consultancy firm Management and Excellence named Petrobras the world's most sustainable oil company.[82]
Oil spills
Sponsorships and namesakes
- In the Speed Racer live-action movie, one of the cars featured is the "Green Energy", a biodiesel-fueled racing car sponsored by Petrobras.[84]
- Petrobras sponsored the Brazilian Série A from 2009 to 2012.[85]
- Petrobras was a secondary sponsor for the AT&T Williams F1 Team from 1999 to 2008 (2000 to 2006 was as only fuel supplier due to Williams had a Castrol lubrication partnership and later increased role to lubricant supplier from 2007 to 2008) and signed again with Williams F1 from 2014 onwards.[86] From 2018, Petrobras left Williams and sponsored McLaren, but cancelled their sponsorship at the end of 2019.
- Petrobras sponsored the Clube de Regatas do Flamengo in Brazil from 1984 to 2009, Racing Club de Avellaneda from 2002 to 2006,
See also
- History of Brazil (1945–1964)
- Eletrobras
- H-Bio
- Ethanol fuel in Brazil
- List of scandals in Brazil
- Petrobras 36 Oil Platform
- Petrosix
- Transpetro
- Tupi oil field
- Walter K. Link
- Brazil- China Relations
- Urucu Oil Province
- BR Mania
External links
References
- Alex Cuadros. Brazillionaires: Wealth, Power, Decadence and Hope in an American Country Spiegel & Gray, 2016^
- pbraform20f_2014.htm - Generated by SEC Publisher for SEC Filing retrieved 5 May 2016^
- Produção média nacional de petróleo e gás bate recorde em 2023