BobbyBahiaBrazil

If Oil Stays Down, Petrobras May Lower Gas Prices

Just got back from Brazil last week. Gas is at 5 dollars a gallon. PBR is a corrupt price fixing monopoly. PBR claims they have to charge market rates as they export heavy oil then buy light oil abroad at market rates. In the end you have a state owned company that refuses to pay a significant dividend to shareholders and rapes the people of Brazil with expensive gas. Here in California you can get unleaded for 2 bucks a gallon. It would be cheaper for Brazil to buy oil from Venezuela, bring it in with tankers, pay for the oil with reais, then Venezuela could buy Brazilian products such as autos, grain, beef, steel, creating jobs for Brazilians and lowering transportation costs. But that would be too easy. PBR insists on spending over a hundred billion dollars on a risky expensive offshore quest for oil.

Brazil and Petrobras Are Awash in New Oil

Petrobras is decades old mainly government owned near monopoly in Brazil. I am in Brazil at this momment. A few days ago there was a write up in the "Folha of Sao Paulo," about the expensive, dirty and usually adulterated gas sold in Brazil. Esso left the country selling its gas staions because it could not control distributors and stop them from adulterating product.
Gas prices are 6-7 dollars a gallon, more than half the stations sell adulterated product, and gas is dirty less refined product.
Dilma, who is Lula's hand picked successor is also part of the "the pre-salt is ours," propaganda and they have been talking about a new state-owned company to mangae the oilfields and collect royalties to be paid in barrels of oil. Number as high as 50% have been floated.
Given the fact that this decades old company is facing huge risk with regards to the cost of extraction and the fact that it pays a dividend yield of next to nothing (That shows you the government doesn't care about shareholders) The govet owns about 40%/

Be careful here. The papers say we won't have any legislation untill after Feb of next year because the Congress in on vacation.

When Lula leaves the next Gov't could be much worse.