By an OGJ correspondent
RIO DE JANEIRO, Jan. 3 -- Brazil's President Luiz Inácio Lula da Silva Thursday tapped José Eduardo Dutra as president of Petroleo Brasileiro SA (Petrobras).
Dutra is a member of the Workers Party (PT) and has served in the Senate since 1994, representing Sergipe state.
Dutra is a geologist by training, and has already worked for the state oil company. However, the appointment raised concerns among oil analysts because of his lack of experience on the business side of the oil industry.
The fact that Dutra will take over the country's largest industrial complex—one of the most profitable companies and a heavyweight on the local stock index—doesn't lessen these concerns.
Separately, Dilma Rousseff, the new mines and energy minister, was elected Petrobras's chairman.
In January 2002, Brazil opened up the oil products sector for imports and set oil products prices in accordance with international crude prices. This gave Petrobras the freedom to increase the prices of its products. Before that, the government set prices every few months on cooking gas and gasoline.
The new minister said that to define pricing policies, both Brazil's petroleum and electric power policies should be the role of the ministry and of the state. Rousseff added that she would utilize the federal tax on fuel (CIDE) as a cushion against fluctuation in the price of international crude. (OGJ Online, Dec.23, 2002).
Petrobras came under fire last year for raising prices, spurring inflation in Brazil, which will surpass10% for the first time since 1994.
During his campaign, Lula took up the issue of Petrobras's extending a contract to Singapore-based Jurong Shipyard for the construction of a $500 million drilling platform. Lula said the project could create about 25,000 jobs in Brazil and could mean some $1 billion in business.
Petrobras reported that average oil and gas production reached 1.7 million boe/d during 2002, representing an increase of 12% over 2001 and also an increase of 11%/year over the last 5 years. Petrobras claims this is more than double the rate of other oil firms of Petrobras's size.
At yearend 2002, proven reserves in Brazil calculated on the criteria of the Society of Petroleum Engineers should reach 11 billion boe, almost 14% greater than the proven reserves registered at yearend 2001.