Brazil looks past trial to revive oil, gas sectors
OREANDA-NEWS. August 25, 2016. Brazil's interim government hopes to revive investment and economic growth after an impeachment trial against suspended President Dilma Rousseff enters a final phase tomorrow.
Interim President Michel Temer, the former vice president who replaced Rousseff in May, plans to embark on a financial roadshow immediately after the conclusion of the Senate trial that is expected to result in Rousseff's permanent ouster by 31 August.
Temer will attend a G20 Summit starting on 1 September in China, a major funding source for state-controlled oil company Petrobras and the primary destination for Brazil's sub-salt crude. The trip will continue on to New York and India, a government official tells Argus.
The tour is aimed at rekindling investor interest and establishing credibility for Temer's government, which Rousseff and her supporters claim took power through a parliamentary coup.
Rousseff has spent the last three months denouncing her former running mate, but she is unlikely to survive the impeachment to complete her second four-year term.
Temer has kept a low profile in the first three months of his interim presidency. He bowed out of the Olympics closing ceremony in Rio de Janeiro on 21 August.
Temer has used his time to corral a fractious congress in support of his pro-market agenda, which will be rolled out in more detail following Rousseff's expected definitive removal.
Among Temer's priorities are unpopular pension, labor, and energy sector reforms seen as vital to resuscitating Brazil's economy.
Brazil's lower house is expected to vote this month on a bill that would allow firms other than Petrobras to operate sub-salt acreage, a change needed to attract big oil companies to a upstream licensing round planned for 2017. The bill has already passed the Senate.
The government is also working on new natural gas regulations that would facilitate the entry of private-sector companies, especially into the midstream segment. Petrobras has said it intends to reduce its dominant role in the gas industry.
The government's Gas for Growth plan is aimed at boosting domestic production and easing the sale of Petrobras' gas assets, including pipelines, thermal power plants and LNG terminals.
The assets are part of the company's \\$14bn divestiture campaign for 2016.
Petrobras said today that a Brazilian court has thrown out an injunction that had threatened the sale of its 49pc stake in gas distribution Gaspetro to Japan's Mitsui.
In December 2015, Petrobras said it concluded the \\$490mn deal, helping it meet its 2015 \\$700mn divestment goal. Weeks later, the Brazilian state of Bahia filed suit claiming the sale diluted its holding in state gas distributor Bahiagas, in which Gaspetro held a 24.5pc stake.