It appears that Brazilian president Lula da Silva is pretty serious about the partial reverse of Brazilian national petroleum company Petrobras's partial privatization [a word of background: in 1997 then-president Fernando Henrique Cardoso (FHC) partially privatized the company, selling 45 percent of its shares on international bourses]. The Brazilian left--usually sober-minded and not exactly slavering fans of the policies of the Lula administration--seems ecstatic, perhaps because for once, in his entire time in office, Lula isn't caviling before international capital and its local collaborators.
Or perhaps Lula's significant improvement over the FHC neo-liberalization of the petroleum industry is precisely why excitable sectors of the Brazilian left are so happy. The reversal is good, but not that good--the partially-privatized Petrobras will have a minimum stake of 30 percent in all new production in the sub-salt fields, the off-shore oil fields that could contain tens of billions of barrels of oil, while other companies will be allowed to participate in production. The editorial board of Brasil de Fato isn't quite so thrilled: they call it a classic Lula compromise, attempting to placate all parties. They add that the "door is still open" for multinational corporations to profit from Brazilian hydrocarbons, concluding that Lula's proposal will go to the legislative branch, where the right-wing senators and congressmen who run their respective chambers will weaken its national-popular components. They will attempt to attempt to convert the proposal into more pandering to foreign corporations and their local affiliates. As Brasil de Fato continues, "In the anti-national and anti-populist opportunist mode that characterizes the Brazilian bourgeoisie, they defend the worst model to exploit the greatest riches of the country."
The FUP, a key petroleum union, asserts that Lula's proposal isn't nearly so strong as it would wish it to be. The group calls for the cancellation of already-auctioned exploration rights, the re-assertion of state-monopoly control over Brazilian oil exploration--encompassing the entirety of the country's territory, not just the sub-salt beds--the total re-nationalization of Petrobras, and the creation of a Sovereign Wealth Fund, democratically controlled, into which the petroleum revenues would be deposited.
Others claim that Brazilian big-business or conservative politicians will quibble about the royalty rates, or Brazil's ability to get sufficient credit or raw currency to cover capital expenditures. Currently, with American debt creation increasing hyperbolically, this is a bit of a concern, but conservative projections for capital investments are well below what the fields will yield in, say, 2020: 150 billion dollars or more annually. Vamos ver.
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