Brazil greenlights study of Petrobras privatization, analysts remain skeptical

The emblem of Brazil’s state-run Petrobras oil firm is seen on a tank in at Petrobras Paulinia refinery in Paulinia, Brazil July 1, 2017. REUTERS/Paulo Whitaker

SAO PAULO, June 2 (Reuters) – Brazil President Jair Bolsonaro’s authorities stated it goals to incorporate state oil firm Petrobras (PETR4.SA) in its privatization program on Thursday, regardless of analysts calling it a long-shot for the far-right chief searching for reelection.

Slightly than triggering privatization in itself, the transfer – not closing till Bolsonaro indicators a decree – would allow the nation’s Funding Partnerships Program (PPI) to start out evaluating the challenge lower than six months earlier than presidential elections.

Bolsonaro has been a harsh critic of Petrobras gasoline pricing coverage amid a surge in the price of gasoline stoked by struggle in Ukraine that has change into a sizzling matter within the run-up to the elections. He additionally floated the thought of splitting Petrobras into varied items as a prelude to privatizing it this week.

He argued that the corporate was not fulfilling its “social perform” as outlined within the Brazil’s structure.

Analysts at BTG Pactual see the privatization as a “difficult job from a political perspective,” including that within the brief to medium time period “this needs to be seen with an excessive amount of skepticism.”

Petrobras’ privatization would additionally should be authorized by Congress, forcing Bolsonaro to rally disparate events to win backing to do it.

In line with the PPI’s particular secretary, Bruno Leal, there’s nonetheless no deadline for sending a Petrobras privatization invoice to Congress and no outlined schedule for any privatization course of.

The corporate’s inclusion in PPI’s report was requested this week by the Mines and Vitality Ministry.

Reporting by Carolina Pulice and Peter Frontini; Enhancing by Chris Reese and Kenneth Maxwell

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