Archive for the ‘Brazil’ Category

Brazil’s energy giant comes clean with investors

| April 27th, 2015 | No Comments »
The Economist

Knowing the worst can help with a recovery. But it is no guarantee. Petrobras issued its much-delayed results on April 22nd, after accountants had scoured its books to find details of many years of scams and kickbacks, which are part of Brazil’s biggest corruption scandal. The state-controlled oil company said that graft had cost it 6.2 billion reais ($2.1 billion). Other charges included a bigger-than-expected write-down of 44.6 billion reais, mainly on a flagship petrochemical complex and a big refinery. The net loss was 21.6 billion reais in 2014, against a 23.6 billion reais profit the year before.

Cleaning up Petrobras (and Brazil’s political system) is a long-term job. In the short term the company is focused on survival, with production sinking, oil prices low, cash scarce, and a hefty bill looming to develop its prized assets: the “pre-salt” oilfields that lie deep below the country’s offshore ... Read More

Brazil’s Power Dynamics Shifting Amid Political Scandals

| April 27th, 2015 | No Comments »
The New York Times


RIO DE JANEIRO — The head of Brazil’s Senate, Renan Calheiros, has been accused of tax evasion, using a government jet to visit a surgeon who alleviated his baldness with hair implants and allowing a construction company’s lobbyist to pay child support for his daughter from an extramarital affair with a television journalist.

Eduardo Cunha, the conservative speaker of Brazil’s lower house of Congress, has also faced — and successfully battled — a list of corruption accusations, from embezzlement to living in an apartment paid for by a black-market money dealer.

In some democracies, figures facing such situations might find themselves banished from public life even if they were never convicted. But not in Brazil, where the men who command the scandal-plagued Congress are actually increasing their power over the scandal-plagued president, Dilma Rousseff.

The move reflects one of the most profound shifts in political power ... Read More

Brazil’s Petrobras: We lost $2 billion to bribery

| April 24th, 2015 | No Comments »
From CNN

The state-owned oil giant announced an overall loss of $7.2 billion in 2014 on Wednesday, two months after its CEO and five other executives resigned over the affair.

Federal prosecutors have accused the former executives of illegally “diverting” billions from the company’s accounts for their personal use or to pay off officials.

More than 80 people have been charged with bribery and money laundering during the criminal investigation — dubbed “Operation Car Wash.”

Dozens of senior officials and politicians are still under investigation. Brazilian President Dilma Rousseff was chairwoman of Petrobras (PBRA) during many of the years when the alleged corruption took place.

She denies any knowledge of the corruption. Her popularity has sunk to record lows because of the scandal and Brazi’s poor economic performance.

Dozens of other companies including construction and transportation firms are implicated in the scandal, and over 750 projects are now under investigation.

“The repercussions are likely to ... Read More

Brazil’s Petrobras takes $17bn hit

| April 23rd, 2015 | No Comments »
Financial Times

By Joe Leahy and Samantha Pearson

Brazil’s Petrobras has estimated its losses from corruption at R$6.2bn (US$2.06bn) and taken a R$44.6bn impairment charge, as the embattled state-owned oil company struggles to emerge from the nation’s biggest political bribery case.

Petrobras released long-delayed audited financial statements for 2014 late on Wednesday, narrowly meeting an end-April deadline. A late filing could have set it on course for a technical default on some of its $137bn in debt.

“From this moment, Petrobras turns over a new page,” said the company’s president, Aldemir Bendine, who was handpicked by Brazil’s President Dilma Rousseff to rescue the company.

The scandal, in which prosecutors allege scores of politicians colluded with former Petrobras executives and contractors to extract billions of dollars in bribes, had sparked fears of systemic risk to Brazil’s finances if the company defaulted.

It helped trigger nationwide protests over the past two months ... Read More

Can Brazil overcome economic malaise and scandal?

| April 22nd, 2015 | No Comments »


Key Points

Brazil’s economic malaise and corruption scandals present significant challenges to President Dilma Rousseff’s ability to govern, just four months into her second four-year term. Latin America’s largest economy is rediscovering that stimulating growth and creating jobs requires controlling government spending, increasing trade, and attracting investment by adopting a host of free-market reforms. The United States and Brazil should jump-start efforts to improve their commercial and diplomatic relations to bolster economic development in a region crucial to both countries.

While US policymakers, commentators, and the media have been distracted recently by the “historic” normalization of US-Cuban relations, the rest of Latin America is beset by extraordinary challenges—not the least of which is the economic malaise and governance crisis in Brazil, South America’s most populous country and the world’s sixth-largest economy.

Sworn in for a second four-year term just over three ... Read More

Petrobras’s oil bonanza: Blessing or curse?

| April 22nd, 2015 | No Comments »

By Daniel Gallas

In 2008, Petrobras and its main stakeholder – the government of Brazil – hit the jackpot.

The state oil firm’s technicians discovered one of the world’s largest oil reserves deep beneath the seabed – under miles of layers of salt.

And then two years later, it struck gold again, finding yet another giant oil reserve.

Optimism was running high. The firm went to the markets and raised over $70bn - the world’s largest share issue ever.

Brazil’s economy was at cruising speed too, finally taking off after years of meagre growth.

But the good times did not last long – for neither the company nor the country. A massive corruption scandal last year eroded much of Petrobras’s market value.

Brazil’s economy too has been on a downward spiral – with high inflation, slow growth and low confidence.

So how did it ... Read More

How the Petrobras Scandal Buried Brazil’s Dream for Offshore Oil

| April 21st, 2015 | No Comments »

By Juan Pablo Spinetto and Anna Edgerton

Buried off the coast of Brazil, beneath miles of seawater, rock and salt, lie vast oil reserves — at least 50 billion barrels — that were supposed to yield untold riches for this nation.

But, as so often happens in Brazil, the early promise of this sprawling prehistoric geological formation known as the pre-salt is giving way to gloom. Eight years after the reserves were discovered, government intervention, corruption and mismanagement at the state-run oil giant Petroleo Brasileiro SA have cast doubt over Brazil’s ability to capture and leverage its oil wealth to lift its entire economy.

The scandal has coincided with a jarring decline in world oil prices and prompted outrage and national soul-searching. Petrobras embodied not just the swagger of Brazil’s oil industry but the can-do spirit of the nation’s quest to be a major player on the world energy ... Read More

The Kickback That Killed Brazil

| April 17th, 2015 | No Comments »
Foreign Policy


RIO DE JANEIRO — Underneath the tiled awning of her whitewashed veranda, Cassia Gonçalves Moreira, 46, scoops clumps of damp pastry from a large plastic tub, rolls them between her hands, and methodically lines the bottom of a dozen or so small tins arranged on the table in front of her.

Next comes the filling: cheese, chicken, or hearts of palm. Then, she molds another dollop of pastry for the lid, before placing the completed empadas on a metal tray. A faint smell of rising dough drifts through the open door. Once she has cooked enough, she will put on her Brazil soccer shirt and start her daily trek around Itaboraí, a town a few miles east of Rio de Janeiro, across the Guanabara Bay, selling each empada for 3 real ($1).

“They don’t exactly pay for everything,” she said. “In fact, they don’t even cover the ... Read More

Petrobras shows corruption is now a high-stakes game in Brazil

| April 16th, 2015 | No Comments »
Financial Times

By Samantha Pearson

In the 1980s, corruption in Brazil was a simple, albeit sweaty, affair. The first challenge for any executive entrusted with paying a bribe was to traipse up and down the streets to find enough black market money dealers willing to sell dollars, explains one former government contractor. In a decade when Brazil changed its currency more often than its president, kickbacks in greenbacks were considered the only ones worth having.

The second challenge was to take the cash to the meeting place, which often involved donning a long winter coat stuffed with banknotes under the tropical sun. “The biggest danger back then was passing out from heat exhaustion,” says the former contractor.

The multibillion-dollar corruption scandal engulfing Brazil’s state-controlled oil company Petrobras could not be more different. With cash allegedly siphoned through more than 300 Swiss bank accounts and laundered via everything from petrol stations to art works, the country’s largest ... Read More

Petrobras, Gazprom ink Bolivia gas deal

| April 15th, 2015 | No Comments »
BN Americas

By Michael Place

Brazil’s state-run oil firm Petrobras has agreed to invest up to US$2.057bn to develop new natural gas fields in Bolivia, officials in La Paz said on Tuesday.

The 15-year agreement forms part of a memorandum of understanding also involving Russian gas producer Gazprom for exploration projects in gas-rich Tarija department.

Under the deal, Petrobras will drill prospects in the Sunchal, San Telmo and Astillero areas, which hold estimated gas reserves of 4.88Tf3 (138Bm3).

According to Bolivia’s state hydrocarbons company YPFB, Petrobras has committed to invest in exploration and production, transport and storage facilities.

“These new areas will allow us to increase our reserves and consolidate Tarija department as Bolivia’s energy center,” YPFB chief executive Guillermo Achá said in a statement.

Achá denied that Bolivia faced an imminent decline in natural gas output due to a lack of new discoveries.

“Gas production is not ending. On the contrary, all these activities indicate that we will increase production,” he added.

Bolivia’s state ... Read More

Una región que arropa la represión

| April 14th, 2015 | 2 Comments »
Felipe Trigos-01

La Séptima Cumbre de las Américas celebrada el pasado fin de semana en Panamá demostró de nueva cuenta la inhabilidad de superar la fascinación con el mito de la revolución cubana y la falta de comprensión sobre los daños que este movimiento trajo, no solo para Cuba, sino para toda la región.

Cuando líderes del hemisferio tienen la oportunidad de coincidir con Raúl o Fidel Castro en reuniones multilaterales, parecería que lo más importante en la agenda es rendir homenaje a los hermanos y aprovechar la oportunidad para la foto, quizás para no provocar la protesta clamorosa de izquierdistas que ven con ojos enamorados ‘la obra’ de los Castro, a pesar de 55 años donde se ha podido constatar la opresión, pobreza y sufrimiento que ha causado a millones que habitan la isla.

La Cumbre en Panamá, que se centraría en temas como la prosperidad y la equidad, acabó sirviendo de plataforma ... Read More

Protesters in Brazil push to impeach President Dilma Rousseff

| April 13th, 2015 | No Comments »
From CNN

From Shasta Darlington

Sao Paulo, Brazil (CNN) Throngs of protesters packed the streets of major Brazilian cities on Sunday, pushing for the impeachment of President Dilma Rousseff.

Fueled by mounting anger over a corruption scandal that has implicated politicians in Rousseff’s party, demonstrators chanted “Out with Dilma” and “Time for change.”

Police estimated that 275,000 demonstrators marched in Sao Paulo. A sea of protesters dressed in the green and yellow of the Brazilian flag used decades-old rallying cries to fire up their ranks, singing rock songs that date back to protests of the country’s one-time military dictatorship.

It’s the second day of nationwide anti-government demonstrations in less than a month. And protesters vowed that it wouldn’t be the last.

There are a number of issues at play. One of the biggest: an investigation into a multimillion-dollar kickback scheme at the state-run oil company Petrobras.

Most of the politicians ... Read More

An Escalating Corruption Scandal Rocks Brazil

| April 13th, 2015 | No Comments »
Wall Street Journal WSJ-01 By MARY ANASTASIA O’GRADY Former Brazilian presidential candidate Aécio Neves speaks for a lot of his compatriots when he says President Dilma Rousseff’s Workers’ Party (PT) used stolen funds to defeat him in Brazil’s runoff presidential election in October.

In an interview in Lima last month I asked Mr. Neves—who is president of the Social Democracy Party of Brazil (PSDB)—whether he lost the election because the socialism of the hard-left Ms. Rousseff had greater appeal to Brazilians than his more market-oriented platform.

He denied the possibility. He lost, he told me, because of “organized crime.”

Mr. Neves, a former governor of the state of Minas Gerais, wasn’t referring to the mafia. He was talking about an alleged skimming operation at the government-owned oil company Petróleo Brasileiro SA (Petrobras). Prosecutors allege that Petrobras contractors were permitted to pad their contracts and remit the excess as kickbacks to the oil company, which passed hundreds of millions of dollars to politicians and, ... Read More

For U.S., Brazil ‘aligned’ itself with human rights violators at the U.N.

| April 13th, 2015 | 1 Comment »
Estadao Brazil

By Jamil Chade

[Translation by IASW]

The Human Rights Council voted resolutions on various crises around the world and Brazil abstained to vote in cases involving Syria and Iran.

“Brazil has aligned itself with the position taken by some of the biggest human rights violators in the world” by choosing not to support resolutions condemning Syria and Iran. The statement was made by US representative to the UN Human Rights Council, Keith Harper, in an exclusive interview in which he doesn’t hide his frustration over the political choices of the Brazilian government. But he also took the opportunity to insist on areas in which Washington and Brazil can collaborate.

Last week, the UN Human Rights Council voted on resolutions on a number of crises around the world. Brazil abstained to vote on matters dealing with Syria and Iran, prompting criticism from NGOs. Now, with a direct speech and without diplomatic language, the American representative ... Read More

Brazil anger simmers over Petrobas bribery scandal and slump

| April 10th, 2015 | No Comments »
From CNN

By Shasta Darlington

Sao Paulo, Brazil (CNN)Hundreds of thousands of Brazilians are taking to the streets in protests across the country, lashing out against President Dilma Rousseff as she struggles with an economic downturn and a massive bribery scandal. The demonstrators have called for the President to be impeached. On the other side Rousseff’s base is holding rallies in her support. 

Why are people angry with the President?

There are a number of issues at play. One of the biggest: an investigation into a multimillion-dollar kickback scheme at the state-run oil company Petrobras.

Petrobras was long considered the corporate jewel in Brazil’s crown, one of the biggest companies in the world by market capitalization.

But last year, investigators launched a sweeping investigation. According to suspects-turned-witnesses, construction companies paid bribes to executives at Petrobras as well as politicians to secure lucrative contracts.

Most of the politicians ... Read More

An ‘Obama doctrine’ fail: Cuba still won’t love us

| April 10th, 2015 | No Comments »
New York Post

The two men will cross paths at the Organization of American States’ seventh summit, a meeting of 35 Western hemisphere heads of state that kicks off today in Panama.

Cuba was finally invited to attend the two-day affair this year.

Because the Communist regime’s membership in the OAS has been suspended in 1962 (it only accepts democracies as members), and because in past years Washington insisted Cuba be banned from the summit, the island nation wasn’t being invited before.

But this year, the United States dropped its objections, and so Cuban President Raul Castro and Obama can be expected to hug it out like the bros they’re fast becoming.

It’s all part ... Read More

¿Puede Obama rescatar su fallida política exterior en Latinoamérica?

| April 9th, 2015 | 1 Comment »
Real Clear World-01

El presidente de los Estados Unidos, Barack Obama, ha notado claramente que muchos en América Latina y el Caribe tienen una afinidad extraordinaria con el mito de la revolución cubana. Lo que aún no tiene claro es que la gran mayoría de los ciudadanos de la región preferiría vivir en el Chile construido por Augusto Pinochet que en la Cuba destruida por Fidel Castro.

Durante la Cumbre de las Américas en Panamá Obama se encontrará con una región que ha perdido la estabilidad y la prosperidad desde que asistió a su primera cumbre en 2009. A pesar de que esperaba cosechar elogios por su acercamiento con La Habana, Obama recibirá en cambio un trato hostil por parte de varios líderes latinoamericanos, quienes encabezados por Nicolás Maduro de Venezuela y apoyados por Castro están determinados en diezmar la influencia que le queda a Washington en una región de suma importancia para la ... Read More

Can Obama Rescue His Failing Latin America Policy?

| April 9th, 2015 | No Comments »
Real Clear World-01

U.S. President Barack Obama has clearly noticed that many in Latin America and the Caribbean have an uncanny affinity for the myth of the Cuban revolution. What he has yet to realize, however, is that the vast majority of the region’s citizens would rather live in the Chile built by Augusto Pinochet than in the Cuba destroyed by Fidel Castro.

As Obama travels to Panama this week for his third Summit of the Americas, he encounters a region that has lost stability and prosperity since the president first attended the summit in 2009. Although he hoped to harvest accolades for his rapprochement with Havana, Obama will instead be greeted by a coterie of hostile counterparts, led by Venezuela’s Nicolas Maduro and abetted by Castro, who are determined to sever Washington’s remaining influence in a hemisphere critical to U.S. prosperity and security.

To be fair, other OAS leaders insisted that Castro ... Read More

Mr. Obama’s opportunity in Panama

| April 8th, 2015 | No Comments »
From the Washington Post By Editorial Board

PRESIDENT OBAMA’s move to restore diplomatic relations with Cuba in December was supposed to improve political and economic conditions for average Cubans and remove an irritant in U.S. relations with other Latin American nations, which have been pushing to end the isolation of the Castro regime. Four months later — a short time, admittedly — there is no sign of those benefits. According to Cuban human rights groups, political detentions have increased: There were more than 600 in March alone. More than 50 long-term political prisoners are still being held. Several Cuban opposition leaders are banned from leaving the country, which means they cannot attend this week’s Summit of the Americas in Panama.

U.S. and Cuban officials have yet to agree on the terms for reopening embassies. But the Castro regime has nevertheless reaped some substantial gains. Raúl Castro will be welcomed to the Americas summit for the first time; Mr. Obama will shake his ... Read More

Obama’s Amateur-Hour Foreign Policy In The Americas

| April 8th, 2015 | No Comments »
Investor's Business Daily

Terrorism: Seeking applause at a summit in Panama, President Obama vowed to swiftly remove Cuba as a state sponsor of terror. It just shows how his foreign policy runs — for political convenience, not national security.

As he headed off to the Summit of the Americas in Panama, President Obama tossed a tidbit for the region’s tyrants that’s expected to be a crowd-pleaser: A vow to quickly lift the State Department’s designation of Cuba as a state sponsor of terror.

The move would let the communist dictatorship buy weapons from the U.S., gain dual-use technologies, end some financial sanctions and open Cuba to foreign aid.

And as for whether Cuba really was a state sponsor of terror and a threat to the U.S., well, that was secondary. Given the huge number of State Department political appointees, an independent assessment isn’t possible.

Pressure to lift the designation has come from the Cuban regime as a precondition ... Read More

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