Brazil´s oil production supports a large part of the country’s economy. However, its current oil crisis was something its government did not oversee. Excessive corruption has made that the Petrobras, Brazilian state-owned oil company, is now involved in a big scandal.
This, and with the fact the oil barrels price went down 50%, is causing the Brazilian economy to crumble. Many have lost their jobs, and the reduction in investments is causes serious economic problems.
All this has led to an oil strike which resulted in 25% of the oil production to be lost, and overall discontent within workers unions. These workers unions argue that the government should not attempt to sell Petrobras´s assets to achieve more revenues.
Although the workers union and government have tried to reach an agreement, the outlook does not seem promising. The oil companies consider that it does not have the sufficient resources to meet the commitments of its major projects, which include the Comperj complex in Rio de Janeiro and others, reason why they believe selling part of the company is the best solution.
With oil prices lower than ever, the dollar price rising and the current strike that remains unsolved, the Brazilian state-owned oil company is undoubtedly at risk. It has already lost six billion reais, and more recently approximately forty-five thousand billion reais in record time.
Many believe all this chaos is due to poor company operations. Those in charge of the State´s balances, consider that they were being too extreme in terms of their earnings and could not adjust the numbers correctly.
The Government is taking strong measures for next year in order to counteract the situation and do not let the country fall into a state of emergency. This is Petrobras biggest challenge to date. For a country with a falling economy to move forward is no easy task; especially one like Brazil that depends so much on its oil production.
Nevertheless, the 2016 Olympic Games offer Brazil a ray of light. The country hopes to obtain many profits, which will allow it to balance its economy.
ALFA