Petrobras Posts Biggest Profit on Record Thanks to Sale of Assets

RIO DE JANEIRO, BRAZIL – Petrobras earned more than R$40 (US$9) billion last year, which represents the highest annual profit in its history. The company submitted its 2019 financial statement on Wednesday, February 19th, after the São Paulo Stock Exchange had closed, while a third of its employees went on their 19th day of strike in protest against the closure of a fertilizer factory and related layoffs .

The huge profit was a result of the contribution – since Jair Bolsonaro and his liberal Minister of Economy, Paulo Guedes, took power – from the sale of an important part of its shares in what is still the largest publicly traded company in the country.

Profits are due to the divestment of state held equity in several transactions, such as the sale of shares of BR Distribuidora, and sales of oil fields. The company’s CEO, Roberto Castello Branco, pointed out that the state divestment “helped to enable the focus on assets of which we are natural owners” and allowed us to invest more in pre-salt exploratory areas, huge reserves discovered under a thick layer of salt in the Atlantic.

This record profit consolidates the trend registered in 2018, when Petrobras returned to profit after four years of losses, since the corruption scandal unveiled by “Lava Jato” broke out. Investigations and decisions about the case continue in Brazil and abroad.

This same Wednesday, a judge sentenced two former Petrobras executive officers, Pedro Barusco and Paulo Roberto Costa, to pay half a million reais each to company employees for personal damages caused by corrupt practices.

The two convicts are collaborating with the court. The Odebrecht case, derived from the Petrobras case, led to the arrest in Spain, a few days ago, of the former executive officer of Mexican Pemex, Emilio Lozoya, accused of receiving bribes from the construction company.

Petrobras’ profit at the end of last year represents an increase of 55 percent compared to 2018, but would be close to that of 2018 without the extraordinary sales. Last year income was achieved, according to the company, with the barrel of oil priced at US$64 in 2019, compared to US$71 the previous year.

The strike engaged in by 21,000 of the company’s 63,000 employees, which increases the risk of scarcity in Brazil, continues despite a judge injunction on Tuesday overturning the layoffs that motivated the strike.

400 employees of the state-owned company and another 600 employees of subsidiary companies that worked in a recently-closed fertilizer factory in Paraná were affected. More than 121 Petrobras units are on strike, including production platforms, refineries and terminals.

The main left-wing opposition parties, Lula’s Workers’ Party (PT) and the Socialism and Freedom Party (PSOL), support the oil workers’ strike as they try to turn it into a case against the broad privatization program designed by Economy Minister Paulo Guedes.

After years of stagnation, production has also recovered, staying at a combined three million barrels a day of oil and gas.