Brazil’s Petrobras Defends Invitation of Over 30 Foreign Companies

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Petrobras, the oil giant of Brazil, took to its website on Monday (January 23rd) to refute criticism that it is favoring foreign companies over national companies in the bidding process for the pre-salt natural gas processing unit in the Rio de Janeiro Petrochemical Complex (COMPERJ). Over thirty foreign companies were invited to participate in the bid, triggering a negative reaction in the sector.

“The employment generated by these companies is as necessary and as welcome as any other. The willingness of the private sector to invest helps the country to get out of the longest recession in our history, provoked by experiments that, through their support and stimuli, have proved to be unsuccessful,” explained Petrobras in a press release on Monday.

In trying to justify the absence of Brazilian companies in the process, the oil giant stated that twenty of Brazil’s largest engineering companies are barred from bidding due to their involvement in Operação Lava Jato (Carwash).

“They were not invited for this reason, and their return to future invitations is linked to the signing of leniency agreements and integrity assessments carried out by the Petrobras Compliance area,” said the statement.

In the press release Petrobras reaffirms its policy of seeking local partners as a priority, but says “slicing the work into several smaller contracts with the sole purpose of guaranteeing national capital competitors” would increase costs and risks.

Director of the Association of Petrobras Engineers (AEPET), Herbert Teixeira, however, says by hiring foreign companies, the problem of corruption won’t go away. “What we are seeing now is the risk of the continuity of cartels, only in the hands of foreigners,” Teixeira said in an interview to business daily DCM.

“When the company that is going to take over this billionaire contract is hired, the job that would be generated here will be generated in Japan, the United States or China, depending on who wins,” he continued. “That is why we at AEPET defend that the model that allows for the participation of medium and small companies.”

Addressing the issue of participation of smaller companies, Petrobras officials note that Brazilian participation in the project will be guaranteed, since the contracts with foreign consortia require a national partner.

In addition, Petrobras says that most foreign companies invited to bid on the works are established in Brazil, generating jobs and income here in the country.