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Petrobras Case Study

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5. NOCs: What are they? 5.1 Why do they Exist? 5.2 Why maintain a NOC? 5.3 NOC and Government Interaction 4.3.1 The Situation in Brazil and Petrobras 6. Strategy: Why are Petrobras so successful? 6.1 Being a state monopoly 6.2 The beginning: A very performant downstream segment 6.3 Oil abundance: The offshore fields 6.4 The market gets deregulated 7. Performance 7.1 Acting as a Monopoly 7.1.1 The Benefits 7.1.1.1 The minimization of risks 7.1.1.2 The technological advantage 7.1.1.3 The inforamtional advantage 7.1.1.4 Cash Flow 7.1.2 The Drawbacks 6.1.2.1 A political interference 8.2 The principal vs Agent: The performance depends on the governemnt 8.2.1 The principals view 8.2.2 The agents view 8.2.3 Evaluation 1. Introduction Petrobras stand out as a particularly successful national oil company. It is one of the world leaders in deep-water exploration and production. Furthermore, it has established itself as the dominant force in the Brazilian hydrocarbon market and its presence aboard is steadily growing. The company’s market value grew from $26.4 billion in 2000 to a high of $173.6 billion in August 2009 and it is currently the largest publicly traded company in Latin …show more content…

Oil experts were generally quite skeptical to the new firm seeing as, at the time, Brazil were not believed to have had any meaningful oil reserves nor the expertise of the industry. These facts however were beneficial to Petrobras for the following reasons: a) the company was not founded among oil riches and could therefore rely on fiscal subisidies for the first 20 years of its operation b) it started its operations with low revenues and as a result it learnt how to rationally select projects in order to guarantee cash flow demanded by its investment program (De Oliveira

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Also, because of her involvement with the Petrobras, the country is also facing further issues within their oil and gas services and exports to other countries. It is because of all of these issues that the allows the country of Brazil to believe that in order to protect their country (especially among the freedom scale) it must take rational measures and impeached President Rousseff. However, because the gesture is unpredictable, whomever replaces President Rousseff can cause even further economical damage to the country. It is therefore up to the countries leaders to make the correct choice in order to protect their people, their services and their status of economical

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Back To The Vortex The Petrobras graft probe took a new turn, most surprising even for Brazilian standards. On November 25th the federal police arrested Senator Delcidio do Amaral, the leader of the government in the Upper House and a prominent member of the ruling Workers’ Party (PT). Along with him went Andre Esteves, founder, CEO and controlling shareholder of BTG-Pactual, Brazil’s biggest independent investment bank. The charges are of malicious obstruction of Justice.

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Thousands and millions of people have taken to the streets in Brazil, to protest against corruption and the government. The population are united in admiration for the judge Sergio Moro, responsible for the decisions of “Lava Jato” Operation. For a large part of the population, Moro, from the 13th Federal Court of Paraná, is a national hero. But why he have became so important to brazilian people? What influence he has exerted in the people?

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But at the same time the disadvantage is not good because some people are not capable of making the right decisions like Hobbe would say, “Throughout his life, Hobbes believed that the only true and correct form of government was the absolute monarchy. He argued this most forcefully in his landmark work, Leviathan. This belief stemmed from the central tenet of Hobbes' natural philosophy that human beings are, at their core, selfish creatures (par 5). Some individuals may make decisions only concerning his or her own personal problem and not really care of other people would feel about the situation. If the delegate goes against the citizen’s he’s representing and not speak up for them he may not have a sit in office as a delegate anymore, he may not get re-elected because of people not trusting him and not being able to provide for them again.

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These laws actually make it easier for firms to enter a new country because the company knows what can and cannot not be performed. Despite Brazil’s economic growth, Brazil’s bureaucratic government has hindered the rate at which laws and regulations are reformed. The World Bank’s latest annual global report stated that Brazil is “126th out of 183 countries” when it comes to the ease of starting a business. Several hurdles such as required permits, property registration, high taxes and corruption are only a few issues that foreign investors must overcome in order to establish a dominant presence in Brazil.

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