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Brazil’s Pre-Salt Extraction Costs Fall To US$8 Per Barrel

Monday, August 14th 2017 - 12:02 UTC
Full article 20 comments

By Haley Zaremba from Oilprice - Not too long ago Brazilian state oil company Petrobras was the most indebted oil & gas company in the world. The long-suffering company has faced dire mismanagement while being weighed down by allegations of involvement in Brazil’s widespread corruption. But that’s all changing. Read full article


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  • :o))

    To sum-up - and irrespective to the excuses & justifications - the Brazilians will continue to pay an absurdly high price for their daily requirements of the fuel consumption.

    Aug 14th, 2017 - 01:41 pm - Link - Report abuse 0
  • Jack Bauer

    Maybe better to hang on to the shares, instead of using them as bog roll...

    Aug 15th, 2017 - 08:04 pm - Link - Report abuse 0
  • :o))

    PERHAPS bullock-carts are more economical AND “GREEN”?

    Aug 15th, 2017 - 09:00 pm - Link - Report abuse 0
  • Jack Bauer

    The way Brazil's going, might soon become

    Aug 15th, 2017 - 10:41 pm - Link - Report abuse 0
  • :o))

    A Mid-Year Carnaval:

    Aug 17th, 2017 - 06:35 pm - Link - Report abuse 0
  • Jack Bauer

    Especially if she has a corporate credit card, like the late pest, Maritha Letíthia Lula da Thilva ...who used to spend up to R$ 100 thousand to come to SP ((by 'Aerolula') to get her ridiculous hair done.

    Aug 18th, 2017 - 12:40 am - Link - Report abuse 0
  • DemonTree

    Did Marisa have a lisp then? Or is it Lula? And what was wrong with her hair?

    RE your post on “Corbyn condemns ”violence by all sides“”:

    I guess the time to go to the police would be after they asked for the bribe, but before you had given one. It must be in someone's jurisdiction... why don't they offer immunity from prosecution for those willing to testify, it sounds like the only way to get anywhere. As an individual, there is not much you can do, the police or other investigators would need to make an effort to stamp it out in each industry.

    It makes we wonder how similar it is for the politicians though. Do those who refuse bribes get 'blacklisted' and receive no support or campaign contributions from companies?

    What did Dilma try to do that Lula disapproved of? And how did he stop her, by having the rest of the party vote against her?

    Heh, so Lula wants to Make America Great (without the 'Again') does he? Is this the speech you are talking about?

    I dunno how clear his plans are to me. It doesn't sound particularly nefarious, although it does rub me the wrong way when these people say 'our America'. I imagine a European politician saying 'our Europe' and get the picture of a fascist...

    I'd say that it's the poverty in Brazil that is out of control. Solve that and the BF will become simply a safety net, but it's easier said than done. Just handing people money isn't a long term solution although it does reduce hardship in the short term. The government also needs to fix the bigger issues that slow growth, look at that 'cost of Brazil', and deal with all the corruption.

    I wrote some stuff about the coup against Chavez, but I've run out of room to post it.

    Aug 18th, 2017 - 01:03 pm - Link - Report abuse 0
  • :o))

    The Brazilian “generosity”: | Like it or not; one MUST admire the “Creativity of the corrupt”! Watch the politicians get MORE powerful & obviously richer; while the “progress” of the population continues towards unemployment, poverty, more suffering, fewer rights and whatever else pushed down their throats by the most generous politicians.

    Aug 18th, 2017 - 01:04 pm - Link - Report abuse 0
  • DemonTree

    @ :o))
    Heh, the EU would probably be willing to pay Brazil a hefty bribe to take some refugees off their hands. Although I doubt the refugees themselves would be too thrilled.

    Re coups:

    The attempted coup on Chavez was all the way back in 2002, well over a decade before things got really bad and the government became clearly undemocratic. I don't think it's right to hold a coup when democracy is still functioning, and it has the risk of failing anyway. Look what happened in Turkey, now there is no opposition to Erdogan left at all.

    And the problem with raising these issues is that no one can see the future. People were saying CFK was similar to Chavez, but she gave up power to Macri with no problems. The PT did not do anything drastic to keep Dilma in power either, despite how dodgy the circumstances of her removal were. Punishing people for crimes they have not committed yet and may never commit seems like a bad idea in general.

    Aug 18th, 2017 - 06:22 pm - Link - Report abuse 0
  • Jack Bauer

    No.Only taking the piss out of Lula’s irritating lisp. Nothing wrong with her hair, but plenty wrong in spending that kind of money…couldn’t she find a hair-dresser in Brasília ?
    Going to the police ‘before’ the bribe : presume you mean to set a trap/ catch them red-handed ? Perhaps, but an agreement between 2 private companies is hardly reason for the police to get involved. In the old days, the ‘conferences” expressly prohibited it, but it happened all the same…anyway, the outcome would be disastrous ; Saw it happen to a ‘smart’ ex-pat executive, who thought he’d be hailed a hero by exposing the kickbacks…the accusation went nowhere, and in trying to save face, his company sent him back home, with a severe warning to ‘mind his own business’…
    Re politicians, only those who have influence, or those who are ‘going places, will be approached…if they refuse to get involved, someone else will…the system protects itself.
    Lula was an advocate of passing strict laws to control the freedom of the press…Dilma, feeling social pressure, was against it…think that was the first public disagreement between the two. Lula would then criticize her publicly, and refuse support when she needed it. Just to show who the boss was.
    Yep, that’s the speech but it’s not all there. It’s easy enough to see, reading between the lines, his 'greater integration' in S.A., involves getting rid of pesky opposition, and leading us into one ‘grand empire’…to me, he’s a dangerous demagogue. Cannot compare the EU to S.A.…two different stages of development…S.A., is not mature enough to avoid dangerous 'adventures'.
    As to the BF, true, and definitely easier said than done.
    Re Chavez, at the time those who opposed him, were in a better position to judge the danger he represented (or not) to the continuation of democracy....after the event, 15 years later, people are apt to see things differently. As to the rest, you've got to live it, and to act upon yr perception of the situation at the time.

    Aug 18th, 2017 - 07:05 pm - Link - Report abuse 0
  • DemonTree

    “presume you mean to set a trap/ catch them red-handed?”

    Yes, exactly. And you're not going to tell me it was legal in any way? Asking for cash in a discreet location doesn't exactly scream legality.

    Who paid for it in the end? I assume the carriers simply upped their rates to cover the cost of the bribes, and therefore the companies exporting the goods paid the difference. So the employees demanding bribes were gaining at their own employer's expense? And I wonder how they listed the bribes in your company's accounts? Odebrecht had a whole department for bribes.

    “if they refuse to get involved, someone else will…the system protects itself.”

    So if Lula, for example, had refused to get involved, he wouldn't have got anywhere in politics? And who won the fight over press freedom, Dilma or Lula?

    I can't imagine they put Lula's whole speech in the article, but you were never at a Lula rally, so where did you see it? Also there are plenty of people opposed to European integration who think they're trying to create a grand empire here, so maybe it's not so different. It makes much less sense for Brazil though, IMO, as it's already a very big country with a large population. Trade links with neighbours make sense, but political integration would just make it even more unwieldy.

    I think plenty of people saw where Chavez was going and left Venezuela. And the Venezuelan people even voted against his first attempt to remove the presidential term limits established in his own constitution. Shame they didn't have the good sense to refuse him a second time. It's a common enough pattern that a popular leader is elected and then won't leave power, making himself into a dictator.

    Aug 19th, 2017 - 11:40 am - Link - Report abuse 0
  • Jack Bauer

    Of course it’s not “legal”- immoral 'yes', but not as serious as public corruption. Quite frankly, in all my years in shipping, no-one went to the police because 1) it doesn’t classify as criminal activity as defined by penal law, the rules which prohibit it were established between private entities, and it doesn't affect the public in general, 2) the ‘conferences’ would have been the appropriate jurisdiction to denounce it, but even when they existed, and laid down strict rules against it, no one did…except the one poor buggar who thought he was doing the right thing and got screwed, 3) if the accusation were to have any effect, the carrier (that felt unfairly treated) would have to make it official, and in the bargain, admit to corruption as well, and pay fines, 4) the exporter might not always be aware an employee was demanding kickbacks, and IF it was, experience shows that most preferred to turn a blind eye and let business carry-on, 5) being no jurisprudence it would be very hard to get a conviction, but even if so, to what gain ? You might expose/end one in a thousand cases of bribery, but at what cost to yourself ? The only thing left to do after all the negative publicity, would be for the carrier to pack up and leave. The biggest proof that it’s impracticable, if not foolish, is the fact that no carrier has ever objected publicly, and even if the exporter didn’t condone the practice, the maximum penalty applied would be to sack the employee - to get rid of him quietly, and allow him to hang on to his ‘booty’…The carriers paid the kickbacks and rates never changed because of them - it's all about competition, so adjusting rates would stand out like a sore thumb, and would defeat its own purpose.
    Re Lula, probably not. But as he was only too pleased to cooperate (behind the scenes) he became useful. Lula interfered /appointed all Dilma's ministers, but rgdng the press' freedom, she prevailed. Saw that part of his speech, and others, on the news.

    Aug 20th, 2017 - 04:00 am - Link - Report abuse 0
  • DemonTree

    I suppose it's not so serious as public corruption, but you're really telling me kickbacks between private companies are not a criminal matter? What are these 'conferences' anyway?

    That money comes from somewhere. Like a tax, the carriers know they will be paying it and have to build it into their costs, so the exporters pay more in the end because of their corrupt employees. Maybe the carriers could start giving a discount when they don't have to pay a bribe (if that ever happens. ;) )

    This is part of why things in Brazil are so inefficient too. If exporters are choosing the carrier based on who pays the biggest bribe, that means they aren't using sensible criteria of who is cheapest / best, and the same thing must happen in other industries. So not only does it push prices up, but also distorts competition.

    For one company or individual, I guess it is impossible to do much, which is why you need a government campaign, to arrest the worst offenders and let the rest know they will be arrested too if they don't stop. Couldn't one of the exporters try to clean up their own business though, by sacking any employees they catch and encouraging whistleblowing.

    Dilma managed to get her way sometimes then, she wasn't completely under Lula's thumb. It's still a bad thing that she was Lula's protege and he kept so much influence. And it's a very bad sign for the future if no politician can succeed without becoming corrupt. We can only hope the current investigations change that.

    Aug 20th, 2017 - 02:35 pm - Link - Report abuse 0
  • :o))

    No matter what happens; maintaining the status quo is IMPORTANT:

    Aug 21st, 2017 - 12:05 pm - Link - Report abuse 0
  • Jack Bauer

    I’m not sure in which chapter of the Law, private kickbacks would fit in, but as long as it doesn’t affect the public, it will carry on, provided the rates have enough fat on. The Conferences were groups of carriers, formed in order to regulate their actions in specific trades, and to protect their interests (80% of the trade reserved for them, and 20% for ‘outsiders’- or 3rd flag), only grouping carriers of the flags of the countries they served. For ex., the Conference of the USEC & ECSA operated between Arg/Bzl, & US/Canada. The West Coast conference grouped carriers that operated between Arg/Bzl and the US West Coast…and so on…rates were fixed, and no-one was supposed to undercut the rates, and obviously, not give kickbacks…but they did. It’s quite a bit more complex than that, but it’s good enough to get an idea. These Conference agreements, despite being supported by the governments of the countries involved, were autonomous in that they supervised themselves.
    The rates were fixed jointly by the Conference members and did not foresee the inclusion of kickbacks built in to them, so there was no way the kickbacks were passed on, so for the carriers it was the cost of doing business. With the even tougher competition after the conferences ended, which meant no more market-reservation, kickbacks became more necessary, and more common…the kickbacks were pretty standard…no auction went on. Kickbacks were part of the business and no company wanted its name involved, so it was all done under the counter, and that was it..
    Dilma was stubborn, not very bright, but got her way perhaps 10% of the time…
    As far as the “Lavajato” is concerned, it is doing a good job, but has still only scratched the surface....If not in the Lavajato, which is investigating the crimes related to PB, there'll probably be others, to investigate the BNDES, Eletrobras, the State-run company pension funds, etc....the politicians had their fingers in every pie. Wait 'n see.

    Aug 22nd, 2017 - 12:09 am - Link - Report abuse 0
  • :o))


    REF: “As far as the “Lavajato” is concerned, it is doing a good job, but has still only scratched the surface”:

    - The politicians have Privileged SPECIAL Protection/Powers
    - Can bend, twist, & change Laws/Constitution in THEIR favor
    - Can continue to be politically active in one form or another
    - A verdict is politically oriented and is not Evidence-Based
    - One moment a corrupt is guilty and the next moment is “free” to be back in power
    - The corrupt are free to retain their illegal gains
    - The population remains Inactive, Unconcerned & Voiceless

    : It will just be an “APPEARANCE” of a Scratch on the Surface or a [VERY SMALL] Tip of a GIGANTIC Iceberg. And IF the corrupt go on “fooling the population”; the situation is very likely to get far worse before it faintly indicates the early-signs of BEGINNING to get better.

    Aug 22nd, 2017 - 10:16 am - Link - Report abuse 0
  • Jack Bauer

    While the contents of your post are absolutely true, one thing you wrote sums it up pretty well, “- The population remains Inactive, Unconcerned & Voiceless”......

    What can you expect from a largely uninformed, or MISinformed, and uninterested population, that still puts soccer, carnival and other superfluous things ahead of how the country is run ? the answer : that the politicians continue to tap dance on the people's heads...

    Aug 22nd, 2017 - 05:48 pm - Link - Report abuse 0
  • DemonTree

    The Conferences sound like cartels, setting rates that no one was allowed to undercut, but they must have been legal too. Did everyone demand the kickback, or were there a few honest people? And presumably this is still going on today... were these international companies, or Brazilian ones?

    It's depressing to know the corruption extends into everything, adding another 'cost of doing business' at every step. Do you think they will keep investigating then, and politicians won't dare to shut the investigations down? Our smiley face poster is always so pessimistic about it.

    Aug 22nd, 2017 - 10:05 pm - Link - Report abuse 0
  • :o))


    The idea of the politicians is to keep the population, ignorant, uneducated [not sufficiently educated], in misery, and suffering from the daily routine; to the extent that they can NEVER have sufficient energy AND time to unite and raise their voices. REF:

    Aug 22nd, 2017 - 10:54 pm - Link - Report abuse 0
  • Jack Bauer

    In a way they were…but they were created, not so much to ‘reserve’ the market for themselves, but to exclude and avoid predatory rate practices by carriers that had no commitment to the trade, coming and going as they pleased, picking out only the good cargo…contrary to the conference carriers which were obliged to perform calls at regular intervals, carry all cargo and to be responsible to some higher authority that could supervise their actions, establishing rules to enable a stable relationship between carriers/ shippers, and eventually settling disputes. Non-conference carriers just took what they want, making their relationship with the mkt somewhat lopsided. I’d say it was the minority of shippers that got kickbacks, depending largely on how ‘noble’ their cargo was, which was evaluated by weight/volume and applicable rate. With the advent of containers in Brazil -1976 – the individual commodity rates eventually were transformed into ‘box’ rates, which varied, basically taking into account the weight (of the full contr load) and cargo value …this made it easy to distinguish the ‘good’ cargo from the ‘bad’, making some shippers of ‘good' cargo seek some advantage in exchange for booking with a determined carrier. There were both national and international carriers (years later, after many buyouts & mergers, some survived to become today’s global carriers), the international ones generally being larger /more efficient than the local ones. In the ECSA & USEC conference there were Argentine, Brazilian and American flag vessels.
    I would like to believe that the investigations will carry on, despite the many sneaky attempts by Congress as a whole, or by individual efforts of dirty politicians, to obstruct justice. One needs to be realistic though, in this country you never what might happen.

    Lol, :o)) is kinda pessimistic, but he’s right...the great majority of elected politicians are in it for themselves, so seeing things from that angle, makes sense.

    Aug 23rd, 2017 - 04:55 pm - Link - Report abuse 0

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