Privatize Petrobras? Lofty ambition, higher hurdles

BRASILIA: Brazil's influential finance minister has convinced President Jair Bolsonaro to consider the once-unthinkable step of privatizing state-owned oil company Petrobras , but stiff political opposition could stifle any effort to sell the country's corporate crown jewel.

The Brazilian government's stake in Petrobras, including stock owned by development bank BNDES, is worth 135 billion reais at current market prices. "Petrobras is a successful example of a public company ... so I find it hard to make the case that privatizing it will be more profitable for Brazil," said federal deputy Marcelo Ramos of the center-right Liberal Party.

"Everything is studied, everything is raised, everything is discussed," Bolsonaro told reporters on Thursday last week."Whether you privatize or not, you have to look at the cost-benefit, what is good for Brazil and what is not," he said. But despite unprecedented moves to sell non-core assets, net debt still stands at around US$70 billion.

The Telebras sale might offer an insight into the potential time frame for Petrobras. A change to the country's constitution was made in 1995 and the company was not privatized for another three years.

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