expatsp

Petrobras: Buy and Sit Tight Like Soros

To IAM Moraes... From your name (and your passion on the subject) I assume that you are Brazilian and can read Portuguese, so here are a few links for you:

A link from the Ministry of Planning of the Federal Government of Brazil, in which Lula (on August 15) complains that half of Petrobras belongs to Americans: clippingmp.planejament...

A link from Brazil's leading newspaper, Estado de Sao Paulo, in which on August 12 Lula says "the oil is ours": www.estadao.com.br/eco...

The exact quote here is "O petróleo não é do presidente da República ou da Petrobras, ele é do povo brasileiro"

You're right that Lula has shown himself to be a market-friendly, sensible leader, and probably that will continue into the next administration. But there are risks here that the original post did not mention, is all. Risks aren't surefire disasters... they're risks.

Petrobras: Buy and Sit Tight Like Soros

Are you aware that the Brazilian government is proposing a new, entirely state-owned company to mange the exploration of these new discoveries? Details are still unclear, but they are potentially pulling the rug out from Petrobras. The reasons are explicitly nationalistic: President Lula has said that the problem with Petrobras is that so much of its profits go to American investors, while "the oil is ours."

Just a potential problem, so far, and the government says that all previous contracts (including with Petrobras) will be respected, but... Petrobras is not Exxon. There are risks to doing the vast majority of your business in a single country with a history of nationalism in relation to petroleum.