New Brazil legislation may bolster Petrobras

Abstract

Significance A key factor in determining the prospects for Brazil's fragile economy is the state of its huge oil industry. This is dominated by Petrobras, itself beset by problems arising from the ongoing 'Car Wash' corruption scandal, low international oil prices and massive debts. New legislation liberalising access to the huge pre-salt offshore oil resources has finally been passed by both houses of Congress. Impacts Whatever legislative and executive moves are made, the international oil price will remain an exogenous variable. This will have the potential to affect oil industry developments in Brazil either negatively or positively. The 'Car Wash' scandal will continue, affecting both Petrobras's operational capability and international investor interest.