Girish Gupta

HOME

PHOTOS

VENEZUELA ECON

ONLINE

Twitter
Instagram
Facebook
LinkedIn
AngelList
Keybase
GitHub
IFTTT

BY COUNTRY

Brazil
Colombia
Cuba
Ecuador
Egypt
Guyana
Iraq
Jordan
Lebanon
Mexico
United Kingdom
Venezuela

BY MEDIUM

Text
Photo
Radio
TV/Video

BY PUBLISHER

Al Jazeera
BBC
BuzzFeed
CBC
Christian Science Monitor
CNN
Daily Mail
Datum
Ecologist
Economist Intelligence Unit
Emerging Markets
Financial Times
Foreign Policy
France 24
Fusion
GlobalPost
Guardian
Independent
La Prensa (Panama)
LatinFinance
Mancunion
Monocle
National (Abu Dhabi)
New Internationalist
New Statesman
New York Times
New Yorker
NPR
PBS
PRI
Radio France Internationale
Reuters
RTE
Sky News
Sun
Sunday Times
Telegraph
TIME
Times of London
USA Today
Vice
WLRN

ABOUT

About
CV
Contact (PGP Key)
Oil Giant Chevron Banned in Brazil After Spill
Nov. 28, 2011

Published by Minyanville

Oil giant Chevron (CVX) is banned from further drilling in Brazil, after an oil spill off the country’s coast earlier this month. While the ban is temporary, there are now doubts about the Californian corporation’s role in the country’s huge and ever-expanding oil industry -- in line for $225 billion of investment over the next five years.


Chevron must explain the causes of the spill which leaked around 2,400 barrels of oil into the sea off Rio de Janeiro on Nov. 8. The country’s National Petroleum Agency (ANP) has accused the company of “negligence,” and there are further accusations that Chevron massaged images when it handed them over to the agency.


“The company’s treatment of the regulatory agency and the Brazilian government was unacceptable,” director of the ANP Magda Chambriard told Bloomberg. “We had to go aboard the platform to search for the original images even after the company was notified to provide us with the video.”


Chevron has already received a fine of $28m and further penalties -- including potentially jail terms for officials -- are expected. The company has taken full responsibility for the leak.


State oil company Petrobras (PBR) is investing a whopping $225 billion over the next five years primarily into developing deepwater subsalt regions off Brazil’s coast. This month’s spill took place in the Frade field, in the oil-rich Campos basin -- currently the source of more than 80% of Brazil’s output.


Quick castigation of Chevron is thought to be an attempt by Brazilian officials to send a message to other companies working in the region, benefiting from the huge investment. However, the $28 million fine is a small dent in Chevron’s market value, writes Reuters’ Jeb Blount.


“The more lasting legacy of the spill may be an awareness that Brazil has overestimated its capacity to exploit deep,” Blount writes, adding that experts say it “partly reflects the huge difficulties of operating in such extreme conditions.”


Brazil’s O Globo newspaper pointed out that Petrobras actually spilled nearly double Chevron’s 2,400 barrels during 2010, adding to those concerns.


Brazil’s economy appears to be soaking up huge foreign investment, with recent figures showing that foreign direct investment during the first nine months of 2011 grew 124% on the same period last year.


However, these figures may be skewed, according to Ipea, a government-linked economic research institute. According to Ipea, a large part of the increase may be thanks to investors disguising portfolio investment as foreign direct investment to save on a financial transactions tax.


The country’s economy is slowing, having expanded at its slowest pace in two and a half years during the third-quarter. GDP grew just 0.3% from the second-quarter -- equivalent to annual growth of 1.2%.


The figures are only an estimate from the Finance Ministry. The government is due to publish official figures next week.


“The economy slowed in 2011 because it was necessary,” said Finance Minister Guido Mantega. “We had an inflation problem, but now inflation is under control.”


Inflation does appear to be slowing. The figure for the year through mid-November is 6.69%, its slowest pace in five months. However, this is still above the government’s 4.5% target.


This may mean further interest rate cuts. President Dilma Rousseff suggested as such in a speech in Brasilia last week, claiming the Brazil could “use monetary police” to shore up economic growth.


The president’s words immediately pushed the real down to 1.8980 to the US dollar, a fall of 1.7% on the previous day.


Analysts are expecting interest rates to fall up to 75 basis points, down to 10.75% on Wednesday.





Brazil’s slowdown may be quicker than expected, as a key indicator of economic activity fell earlier this month, thanks to the crisis in Europe as well as slowing growth in the US.


The Central Bank’s IBC-Br economic activity index fell 0.32% during the third quarter. This -- along with a 10% fall in car sales in October from the previous month as well as a 2% drop in industrial output in September from the previous month -- has raised concerns about the speed of the slowdown.


“Like a driver who sees a deer in the middle of the road long before his passengers,” writes Joe Leahy in the Financial Times, “the government is swerving to avoid a collision in the economy way before most observers have started to worry.”




More...

Brazil's World Cup Raises Fear of Rampant Child Prostitution
Dec. 12, 2013


Maracana stadium is focus of football and protests in Brazil
Jul. 1, 2013


Brazil protests run gamut from health care to World Cup
Jun. 23, 2013


Brazilians angry over taxes, corruption take to streets
Jun. 18, 2013


Brazil's Protests: Social Inequality and World Cup Spending Fuel Mass Unrest
Jun. 18, 2013


Brazil's growth has a monkey on its back
May. 29, 2012


Second Chevron oil spill in Brazil halts production
Mar. 16, 2012


Mixed Carnival for Brazil's Largest Companies
Feb. 23, 2012


Brazil and Mexico Look to Rewrite Auto Trade Pact
Feb. 6, 2012


Yet another minister resigns from Brazil government
Feb. 3, 2012


Brazil Prosecutors Move Forward in Chevron Oil Spill Case
Jan. 30, 2012


British Visit to Brazil Overshadowed by Falklands Dispute
Jan. 20, 2012


Brazil Pesticide Use Sends Orange Juice Prices to Record Highs as FDA Threatens Ban
Jan. 13, 2012


Brazil Overtakes UK, Looks Forward to 2012
Jan. 5, 2012


Chevron, Transocean Face $10 Billion Fine in Brazil Oil Suit
Dec. 16, 2011








© Girish Gupta