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Interventionist wing, oil exploration on the Amazon River: who is Magda Chambriard, Lula’s candidate for the presidency of Petrobras

The dispute between the Ministry of Mines and Energy and the company’s management brought down the president of Petrobras.

President Luiz Inácio Lula da Silva invited civil engineer Magda Chambriard to assume the presidency of Petrobras. The engineer reportedly accepted the invitation, but the appointment still needs to be approved by the company’s Board of Directors. There is no date yet for the Council’s decision.

A civil engineer, Chambriard began working at Petrobras in 1980, as an intern, and remained there for 22 years. If her name is approved, she will be the second female president in the history of Petrobras, after Maria das Graças Foster, who led the company between 2012 and 2015, during the governments of Dilma Rousseff.

Between 2012 and 2016, Chambriard held the position of director general of the National Petroleum Agency (ANP). She was also part of the transition group in the energy area of ​​the Lula government and was considered to chair the PPSA, the company that manages pre-salt, but she rejected the offer.

Chambriard has been director of the Tax Advisory Department of the Legislative Assembly of Rio de Janeiro since April 2021 and partner of the Chambriard Engenharia e Energia company since January 2018. She was coordinator of oil and gas research at FGV Energia.

Chambriard’s appointment reportedly came from the Minister of Mines and Energy, who was against Prates’ management of the company.

‘Interventionist wing’, exploration in Amazonas and privatization

According to political analysts, Chambriard’s appointment is seen as a victory for the so-called “interventionist wing” of the government, that is, those politicians who believe that the federal government should intervene more actively in the management of the company to pursue state objectives, unlike those who think that Petrobras should be managed exclusively following the dictates of the market.

Prates’ fall itself was seen by the market as a government intervention, which had a bad repercussion on the market. On Tuesday (14/5), PBR shares, which correspond to the common shares of Petrobras, fell 8% in the US after market (trading period that occurs after the official close of the market).

On environmental issues, Chambriard’s appointment is not expected to represent a radical change from Prates. On the most controversial point – which concerns the possibility of oil exploration in the waters near the Amazon – both Chambriard and Prates were in favor.

Magda Chambriard recently spoke out in favor of oil exploration at the mouth of the Amazon River, which sparked controversy at the start of Lula’s third term.

The Brazilian Institute for the Environment and Renewable Natural Resources (Ibama) and the Ministry of Environment and Climate Change, led by Marina Silva (Rede), opposed the idea.

On the other hand, in favor of the proposal are the Ministry of Mines and Energy, led by Alexandre Silveira (PSD-MG), and Petrobras – including the dismissed Jean Paul Prates (PT-RN).

In a late April interview with Brasil Energia magazine, Chambriard – who was working as a consultant – said: “I think we should now focus our efforts on Pelotas and Parecis [campos no Sul e Centro-Oeste do país]. But we cannot give up the Equatorial Margin. At this point my focus is Foz do Amazonas, due to the type of geology, distance from the coast, deep water and thicker slope.”

Prates had also recently defended oil exploration in the region.

“Either we go to the equatorial margin or we start importing fuels from other countries again,” he said last month.

The mouth of the Amazon River is where the famous river of the northern region flows into the sea. It is part of a region known as the Brazilian Equatorial Margin, which extends from Amapá to Rio Grande do Norte.

Petrobras is interested in studying the potential for oil exploration in this location: the company estimates that 14 billion barrels of fossil fuel can be extracted from there.

However, before starting any such project, it is necessary to obtain the environmental licenses required by law.

When the project involves the country’s territorial sea, the body responsible for issuing this document is Ibama.

Petrobras has requested the license to study the possibility of oil exploration in a specific block: FZA-M-59.

The request was rejected after an opinion issued by Ibama technicians highlighted “technical inconsistencies” in the request.

For the project to move forward, Petrobras needs this environmental license. At this time, the company is investing in further research into the characteristics of Foz do Amazonas.

In an interview with Reuters last year, Chambriard said it would be up to Lula to resolve the impasse and that technical issues relating to the exploration of Foz do Amazonas had already been “exhausted”.

“This impasse, where one part of the government wants it and another part doesn’t want it, whoever has to define it is the President of the Republic. We have reached a point where whoever has to define it and be the one who makes the difference is the one who had 60 million votes,” he told Reuters.

In the same interview, he defended the exploration of new frontiers such as the Amazon, arguing that pre-salt resources – large reserves discovered by Petrobras two decades ago in the deep layers of the seabed – are not “infinite”.

“If the Brazilian government wants a strong state company, it cannot give up continuing the exploration of the borders relevant to the country. Otherwise an important player will disappear in 20 years and after what do we do with Petrobras, which is being a company mainly E&P (exploration and production)?”

As for privatizing Petrobras’ assets – something that had been under consideration during Jair Bolsonaro’s government – ​​Chambriard was sceptical.

“We want multinationals to come here. This is essential right now, since we have several municipalities that are sinking due to the lack of investments and resources that could be used,” he told BBC News Brasil in 2021, in an interview with BBC News Brazil. .

“But if these foreign companies come here to buy everything abroad, produce oil, pay taxes and leave, we will not get the outcome that a country wants, which is to create jobs for its children.”

He defended the adoption of policies that favor the purchase of national components and the use of Brazilian labor.

Prates dismissal: Petrobras profits and losses

Jean Paul Prates fell after months of attrition with the federal government

Prates’ resignation occurred at a meeting in which President Lula, the Minister of Mines and Energy, Alexandre Silveira, and the Minister of Civil Housing, Rui Costa, were personally present.

In a report by BBC News Brasil, the company confirmed the dismissal and said, in a statement:

“Petrobras informs that it has received this evening from its President, Mr. Jean Paul Prates, a request that the Board of Directors of the Company meet to consider the early termination of his mandate as President of Petrobras in a negotiated manner. Furthermore, Mr. Jean Paul informed that, if and once the indicated closure is approved, he intends to subsequently submit his resignation from the position of member of the Board of Directors of Petrobras. The facts deemed relevant will be promptly communicated to the market.”

Prates’ resignation is being interpreted as a reaction to Petrobras’ decision to significantly increase dividend distribution to shareholders, which has generated intense debate.

In 2022 and 2023, the company stood out as the world’s largest dividend payer, disbursing a total of $57.6 billion.

According to GloboNews, when Prates disagreed with the government’s leadership and abstained from the vote, his position was not well received at the Palácio do Planalto.

The company’s high dividend payments divide opinion.

On the one hand, part of the government and groups that defend the central role of the state company in the country’s development would like the company to reduce payments to shareholders to expand its investments, for example, with the construction of new refineries (units that transform crude oil into fuels) and alternative energy sources.

On the other hand, market analysts and shareholders of the company argue that the company maintains a high level of dividend payout, which makes its shares more attractive. They argue that the company already has a high level of investment and that some projects of interest to the government, such as refineries, would not be profitable.

Amid this controversy, the company’s shareholders approved, on April 25, the distribution of R$21.95 billion in extraordinary dividends, based on 2023 earnings.

The government of Luiz Inácio Lula da Silva had attempted to block the release of these resources as early as March.

Extraordinary dividends are those paid in excess of the minimum established by market rules and by the company itself. Petrobras had already announced a total of 72.4 billion reais in ordinary dividends based on 2023 earnings, part of which had already been paid last year.

The approval of the additional payment in April reflected Palácio do Planalto’s withdrawal after the state company’s shares plunged 10% in one day last month due to market dissatisfaction with the initial decision.

Although Petrobras is a publicly traded company, the union maintains control of the company and, therefore, is decisive in the decision to release these resources.

However, the change of direction still had a positive side for the government.

As the largest shareholder of Petrobras, the Union is expected to receive R$6 billion from the extra dividends released, an amount that could help reduce the hole in the federal accounts.

Source: Terra

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