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Petróleo Brasileiro S.A., or Petrobrás, is a public-private venture that operates in the oil, natural gas, and power industry within both the Brazilian and international markets. Brazil's oil industry has a long, turbulent history. Up until the 1930s the world's oil market was controlled by a half-dozen U.S. and European companies, leading to concern in Brazil that the country's energy future was at the mercy of this monopoly. The National Petroleum Council (CNP) was set up in 1938 to explore, develop, and market the country's oil resources. Shortly after World War II the country engaged in an intense debate over how to secure oil resources for its future needs. It was generally understood that without a strongly guaranteed supply of energy, industrialization of the Brazilian economy could not be achieved. The armed forces, industrial leaders, and left-leaning factions all considered energy autonomy an imperative for the country's future security and well-being.

Whereas nationalists were in favor of excluding foreign capital and granting rights exclusively to Brazilians for oil exploration, extraction, refining, and marketing, moderate sectors were in support of allowing foreign investment in exploration of these resources, given the country's shortage of capital and technology. President Getúlio Vargas leaned toward the latter view, which the nationalists branded as "selling out" to foreigners. In 1953, amid a far-reaching nationalist campaign around the slogan "It's our oil," Vargas, in his second term of office, instituted a government monopoly on the oil industry and approved the organization of Petrobrás, without foreign investors.

At first Petrobrás was at the center of political disputes, as nationalists and union leaders tried to dictate the company's guidelines. Once the military came to power in 1964, Petrobrás was strengthened considerably, becoming the largest Latin American oil company in terms of sales by 1990, even though Brazil's known reserves at the time were just over 1 billion barrels. Under the military regime, although key management positions were held by officers, the company remained independent of the armed forces and political groups, unlike other Latin American petroleum companies.

In 1983 Petrobrás began discovering large reserves of oil and natural gas, mostly in the continental shelf. In 1997 Brazil's daily output surpassed the one-million-barrel mark. That same year, within the context of liberal reforms and a policy under Fernando Henrique Cardoso's administration (1995–2001) of limiting the government's role, the state oil monopoly was abolished, with the federal government retaining ownership of hydrocarbon reserves. By 2006 two-thirds of shares in Petrobrás were privately held, with 4 percent traded on the New York Stock Exchange. The Brazilian government held 56 percent of the voting capital. In 2006 the country's oil production was nearing self-sufficiency, at 1.92 million barrels per day. Brazil's reserves are estimated at 11.458 billion barrels of oil and natural gas.

Petrobrás operates in twenty-three countries and is a major player in exploration and production in Venezuela, Peru, and Ecuador and in refining in Argentina and Bolivia. In 2006 its overseas output was 230,000 barrels of oil and gas per day. Petrobrás invests in human-resource development and runs a world-class research and development center (CENPES).

See alsoCardoso, Fernando Henrique; State Corporations; Vargas, Getúlio Dornelles.


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                                          Eul-Soo Pang

                                   Maria LetÍcia CorrÊa