Lula Asks Petrobras to Tweak Investment Plan

© Salty View / Adobe Stock
© Salty View / Adobe Stock

Brazil's leftist President Luiz Inacio Lula da Silva pressed the head of state-run oil firm Petrobras, Jean Paul Prates, to modify the company's 2024-2028 investment plan to prioritize local job creation, five sources told Reuters.

Lula's requests to Prates may raise fresh fears of political interference in the company, which under previous administrations has come under pressure to boost Brazil's economy over the concerns of private investors.

In a Nov. 9 meeting in Brasilia, Prates presented Lula with a draft of the investment plan, which is due to be unveiled at the end of this month, the sources said.

They said Lula complained about Petrobras' lack of planned investments in Brazil's shipbuilding industry, a sector that has long been close to his heart and which he hopes to revitalize.

Lula told Prates that Petrobras should commission 25 ships to be built in Brazilian shipyards, instead of the four currently planned.

He also complained about Petrobras hiring foreign suppliers, arguing it should instead focus on using Brazilian firms, the sources said.

Additionally, Lula asked for Petrobras to push forward completion of a fertilizer factory in Mato Grosso do Sul state by two years, so it is finished before his term ends in 2026.

Another of Lula's suggestions was to kickstart projects currently listed in the plan as under preliminary analysis.

When asked for comment, Petrobras referred Reuters to a Nov. 8 statement, in which it said it is still finalizing its investment plan. Any eventual changes to its spending plans would follow the strategic guidance approved by the company's board, the statement said.

Brazil's presidency did not immediately respond to a request for comment.

Last week, Reuters reported that Petrobras' plan will include around $100 billion in investments that the firm is both analyzing and those it has already committed to. In the previous 2023-2027 plan, Petrobras projected $78 billion in investments.

The sources said Lula's requests will likely complicate completion of the plan before the end-November deadline. Prates is due to meet the president next week to discuss alterations.

The plan has yet to be presented for approval by Petrobras' board.

(Reuters - Reporting by Sabrina Valle, Lisandra Paraguassu, Rodrigo Viga Gaier; Additional reporting by Marta Nogueira; Writing by Fabio Teixeira; Editing by Roberto Samora, Gabriel Stargardter and Marguerita Choy)

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