Lula’s Petrobras Comments Cause Concern

Brazil’s President Luiz Inacio Lula da Silva has caused some concern among the private sector by saying federal energy company Petrobras (NYSE: PBR) must follow the government’s development strategy.

“It’s not about dictating rules to Petrobras,” Lula said in a ceremony for the company’s transport unit Transpetro. “It’s about saying Petrobras is controlled by the Brazilian government and the company needs to fit in a strategy to develop the country, while respecting its specific interests.”


Petrobras must focus on social issues and not solely on profits, he said.

MARKET REACTION

Some market analysts were concerned about Lula’s comments.

“Lula’s statement was worrying because we cannot say how much his government’s policy of purchasing the maximum amount of Brazilian-made equipment for Petrobras is going to cost the company,” Felipe Cunha, market analyst for brokerage Brascan Corretora told BNamericas.

BNamericas