[thackney]

Petrobras is saddled with mandates and heavy government interference that analysts say have overburdened the company.

A few years back I was on a design team for new refineries in Brazil. Brazil required 15% tax on anything not made or done in Brazil. They also required a large percentage of the manhours spent on design done in Brazil. Everyone competing for the work teamed up with local firms that we would have to train. They were good in their capabilities, but not up to the level needed for the amount of work and the type of work required for several brand new refineries.

Also the refineries had to be placed in remote areas to help build up those areas. Power plants were required to be larger than needed for the refineries. Small cities were to be built to supply operational workers with places to live, eat, shop and basic entertainment like movie theaters.

In the long run, this strategy makes them a stronger economic nation. In the short run, it makes it difficult to entice oil companies to invest their dollars versus other locations.

[mountainlion]

Didn't Obama give George Sorros and Brazil $4B?

[Red Badger]

Fordlandia II......................

[Red Badger]

http://en.wikipedia.org/wiki/Fordl%C3%A2ndia

[Zhang Fei]

In the long run, this strategy makes them a stronger economic nation. In the short run, it makes it difficult to entice oil companies to invest their dollars versus other locations.

In the long and short run, the policy is misguided, because there is no free lunch. East Asian countries have flourished, and overtaken Brazil despite a paucity of natural resources because they've always kept things simple. They provide infrastructure and cheap (relative to their level of education/training) labor, and foreign companies provide capital and knowhow. And those countries upgrade their infrastructure and labor as foreign companies get their economies off the ground. Brazil, like India, wants to sit back and zero out foreign company profits. Without its vast natural resources, Brazil would be worse off than India, which has 1/4 China's nominal GDP per capita.

[spokeshave]

There were a lot of government authorities saying the reserves of Brazil were 50 billion barrels, 100 billion barrels, even 240 billion barrels..

Ha...small potatoes......when the Green River Formation weighs in at 3 trillion barrels.

[2001convSVT]

Government corruption killed this golden goose.

[Erik Latranyi]

Brazil elects a communist as President and their financial surplus disappears and their economy tanks.

Imagine that!

[SoothingDave]

My company did a lot of work with Petrobras in the last 5 years or so. Yes, the “local content” becomes an issue, as they ratchet the requirement up and up. And everything is either expensive to buy there or expensive to import.

And they definitely bit off more than they could chew with trying to build/expand at numerous sites simultaneously. There are only so many qualified workers/engineers.

Then, on top of that, they make it difficult to have foreigners come in to work. I had a proper visa to provide “technical assistance” and they would not renew it after the year expired.

[Obadiah]

That, my friend, is a classic example of the inefficient central planning model. I have little doubt that all those national objectives would have freely and abundantly been realized without the heavy and highly inefficient interference of the government's central planners.

Once again, the government throttles the golden goose thinking that if they squeeze hard enough they can force the goose to produce more. In the end, of course, they deprive the throttled goose of the necessary oxygen it needs to survive. The result is always the same with this government strangulation, misery for many through the unnecessary destruction of the means of production.

[quimby]

Reporting for this article was supported by a grant from the Pulitzer Center on Crisis Reporting.

Found the above at the end of the article. Seems odd to me. I didn’t know they were contracting stories to non democrat party groups

Maybe if i buy more amazon stuff they won’t need the extra income.

[usconservative]

More than six years later, the outlook for Brazil’s oil industry, much like the Brazilian economy itself, is more sobering. Oil production is stagnant, the state-controlled oil company, Petrobras, is hobbled by debt

Poor George Soros!!! ROFL!!!

[Thermalseeker]

“And now it seems the love is gone.”

I'm sure it has absolutely nothing to do with the knuckle dragging, mouth breathing Marxist/Socialist the Brazilians elected as their President in 2010.....

[Tea Party Terrorist]

Brazil is turning into Argentina, Argentina is turning into Venezuela and Venezuela is turning into Zimbabwe. - WSJ

[Jim from C-Town]

“Brazil is the country of the future, and always will be!”

IOW: It is a country that should be a first World dominant nation, but Latin American Leftism and poor governance strands it in a second/third World existence

[fella]

Oil production is stagnant, the state-controlled oil company, Petrobras, is hobbled by debt, and foreign oil companies are wary of investing here. “It’s funny, a few years ago, everybody loved Brazil,” said Roger Tissot, a longtime consultant on Latin American energy. “And now it seems the love is gone.”...

Socialism does that to business. If they take it all for themselves and won't let you make your investment back with some profit why invest?

[T-Bird45]

Sounds like this century’s Brazil = last century’s Mexico and the oil execs know how that turned out.