With top executives already in jail, 62 alleged bribe-receiving politicians sweating bullets and dozens of companies now under investigation, how will the Petrobras scandal impact the Brazilian oil giant’s investments in Argentina?
A detailed analysis in today’s iProfesional poses that question and puts the magnitude of the scandal in local terms: the estimated US$45 billion in illegal surcharges, bribes and kickbacks is a figure equivalent to 150% of the total reserves in the Argentine Central Bank.
Accusations over the web of corruption enveloping Brazil’s largest company have already forced the resignation of former CEO Maria das Gracas Foster, and opinion polls show 50% of Brazilians believe recently re-elected President Dilma Roussef was fully aware of the Petrobribes. With Roussef’s approval rating fast approaching single digits, calls for impeachment are growing louder among opposition parties.
In Argentina, Petrobras is likely to begin losing control over the 3,000 square miles (8,000 square kilometers) of land it controls with oil and gas exploration licenses in 22 areas of provinces like Santa Cruz and Neuquen. Petrobras already dismissed teams from the Vaca Muerta shale project which is semi-paralyzed given the recent plunge in crude oil prices.
“The companies that work for Petrobras are not drilling like they used to (in Argentina). The company is not renewing work contracts with heavy equipment companies, and nobody believes that is going to change in the short or medium term. Petrobras has slashed investment dramatically in Argentina,” says Guillermo Pereyra, the head of the Private Oil & Gas Union in Neuquen, Rio Negro and La Pampa. (Full Story in Spanish)
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