Petrobras

Business areas

The company operates in six business areas, listed in order of revenues:

Production and reserves

Petrobras controls significant oil and energy assets in 16 countries in Africa, North America, South America, Europe, and Asia.

However, Brazil represented 92% of Petrobras' worldwide production in 2014 and accounted for 97% of Petrobras' worldwide reserves on 31 December 2014.

As of 31 December 2014, the company had 8,112.8 million barrels of oil equivalent (4.9633×10¹⁰ GJ) of proved developed reserves and 4,599.7 million barrels of oil equivalent (2.8140×10¹⁰ GJ) of proved undeveloped reserves in Brazil. Of these reserves, 62.7% were located in the offshore Campos Basin. The largest growth prospect for the company is the Lula oil field in the Santos Basin.

In 2015, the company produced 2.284 million barrels of oil equivalent (13,970,000 GJ) per day, of which 89% was petroleum and 11% was natural gas.

International investments

Reserves held outside of Brazil accounted for 8.4% of production in 2014. The majority of these reserves are in South America; the company has assets in Argentina, Bolivia, Chile, Colombia, Venezuela, Paraguay, and Uruguay.

Petrobras owns refineries in Texas (100,000 barrels per day of throughput), Okinawa, Japan (100,000 barrels per day of throughput), and Bahía Blanca, Argentina (30,000 barrels per day of throughput).

The company also owns exploration blocks in the Gulf of Mexico and through joint ventures has production in Nigeria, Benin, Gabon, and Namibia.

Ownership

The Brazilian government directly owns 54 percent of Petrobras' common shares with voting rights, while the Brazilian Development Bank and Brazil's Sovereign Wealth Fund (Fundo Soberano) each control 5 percent, bringing the State's direct and indirect ownership to 64 percent. The privately held shares are traded on BM&F Bovespa, where they are part of the Ibovespa index.

Corporate social responsibility

Petrobras is a major supporter of the arts in Brazil.

Corporate milestones

Petrobras was created in 1953 under the government of Brazilian president Getúlio Vargas with the slogan "The Oil is Ours" (Portuguese: "O petróleo é nosso") and was given a legal monopoly in Brazil. In 1953, Brazil only produced 2,700 barrels of oil per day.

In 1961, the company's REDUC refinery began operations near Rio de Janeiro, and in 1963, its Cenpes research center opened in Rio de Janeiro; it remains one of the world's largest centers dedicated to energy research.

In 1967, the company established a Petrobras Quimica S.A ("Petroquisa"), subsidiary focused on petrochemicals and the conversion of naphtha into ethene. Petrobras began processing oil shale in 1953, developing Petrosix technology for extracting oil from oil shale. An industrial-size retort began processing shale in the 1990s. In 2006, Petrobras claimed that this industrial retort had a design capacity to process 260 tonnes/hour of oil shale.

In 1994, Petrobras placed into service Petrobras 36, the world's largest oil platform. The platform sank after an explosion in 2001 and was a complete loss. In 1997, the government approved Law N.9.478, which broke Petrobras's monopoly and allowed competitors to develop Brazil's oilfields. The Brazilian government also created the National Petroleum Agency (Agência Nacional do Petróleo, ANP), responsible for the regulation and supervision of activities in the petroleum industry, and the National Council of Energy Policies, a public agency responsible for developing of public energy policy.

In 1999, the National Petroleum Agency signed agreements with other companies, officially ending the company's monopoly.

In 2000, Petrobras achieved a world record for oil exploration in deep waters, reaching a depth of 1,877 metres (6,158 ft) below sea level.

In 2002, Petrobras acquired the Argentine company Perez Companc Energía (PECOM Energía S.A.) from the Perez Companc family and its foundation, for $1.18 billion. This acquisition included assets in Argentina, Brazil, Venezuela, Bolivia, Peru, and Ecuador. The company had 1.1 billion barrels of crude oil reserves and production of 181 thousand barrels of oil equivalent (1,110,000 GJ) per day.

In 2005, Petrobras announced a joint venture with Nippon Alcohol Hanbai to sell ethanol from Brazil to Japan, called Brazil-Japan Ethanol.

On 21 April 2006, the company started production on the P-50 oil platform in the Albacora East field at Campos Basin, which made Brazil self-sufficienct in oil production.

By November 2015, the company had accumulated $128 billion in debt, 84% of which was denominated in foreign currencies.

Production

In 1961, Petrobras geologist Walter K. Link published Link's memorandum, which implied that the company was better off exploring offshore instead of onshore. In 1963, Petrobras discovered the Recôncavo and Carmópolis oil fields.

The company's growth was halted by the 1973 oil crisis. The entire country was affected, and the "Brazilian miracle", a period when annual GDP growth exceeding 10%, ended. Petrobras nearly went bankrupt. In 1974, the company discovered an oil field in the Campos Basin. This discovery boosted its finances and helped it restructure nationwide. In 1975, the Brazilian Government temporarily allowed foreign operators in Brazil, and Petrobras signed contracts with foreign companies to explore for more oilfields in Brazil.

The company was also affected by the 1979 energy crisis, although not nearly as badly as in 1973.

In 1997, Petrobras reached the production milestone of 1 million barrels (160,000 m³) per day. The company also executed agreements with other Latin American governments and began operations outside Brazil.

In 2003, on its 50-year anniversary, Petrobras surpassed 2 million barrels of oil equivalent (12,000,000 GJ) of daily production.

On 1 May 2006, after the Bolivian gas conflict, Bolivia's president Evo Morales announced the nationalization of all gas and oil fields in the country and ordered the occupation of all fields by the Bolivian Army. On 4 May 2006, Petrobras cancelled a major future investment plan in Bolivia as a result. The Bolivian Government demanded an increase in the royalty payments made by foreign petroleum companies to 82%, but wound up settling for a 50% royalty interest.

In 2007, Petrobras inaugurated the Petrobras 52 Oil Platform. The 52 is the biggest Brazilian oil platform and the third-biggest in the world.

In 2007 and 2008, Petrobras made several major oil discoveries including the Lula oil field (formerly known as the Tupi field), the Jupiter field, and the Sugar Loaf field, all in the Santos Basin, 300 km off the coast of Rio de Janeiro. The oil fields were discovered by partnerships that include Petrobras, Royal Dutch Shell, and Galp Energia. However, estimates of reserves in these new fields varied widely.

In January 2009, the P-51 Platform, the first semisubmersible platform built entirely in Brazil, started production in the Campos Basin. The platform is capable of producing up to 180,000 barrels of oil per day.

In February 2009, China agreed to supply Petrobras with US$10 billion in loans. In exchange, Petrobras agreed to supply 60,000-100,000 barrels of oil per day to a subsidiary of Sinopec and 40,000-60,000 barrels of oil per day to PetroChina.

In August 2009, Petrobras acquired ExxonMobil's Esso assets in Chile for US$400 million.

In September 2010, the company completed a US$70 billion share offering, the largest share offering in history. The funds were to be used to develop the newly discovered oil fields.

In 2012, Petrobras handed back permits that it had to explore offshore New Zealand.

In July 2013, a worker strike action shut down production at several of the company's oil platforms.

In September 2013, Petrobras sold 11 onshore exploration and production blocks in Colombia to Perenco for US$380 million.

It emerged in September 2013 that the US government had been allegedly spying on Petrobras after Organizações Globo reported the claims on national television. The information was reportedly provided by US journalist Glenn Greenwald. Petrobras announced that it was investing R$21 billion over five years to improve its data security.

In 2014, the company sold its assets in Peru to PetroChina for US$2.6 billion.

In 2014, Petrobras set a new company record for average daily production of 2.863 million barrels of oil equivalent (17,520,000 GJ).

Operation Car Wash and related protests in Brazil

In 2014, the largest corruption scandal in the history of Brazil, centered around Petrobras, was uncovered. According to the investigation, a small number of top Petrobras officials colluded with an organized cartel of 16 companies to overcharge Petrobras for construction and service work in return for bribes and kickbacks. Petrobras officials have pegged the total of all bribes at nearly $3 billion. As of August 2015, 117 indictments have been issued, 5 politicians have been arrested, and criminal cases have been brought against 13 companies. Brazilian president Dilma Rouseff, who promised to reduce corruption during her election campaign, and former Brazilian president Luiz Inácio Lula da Silva, both of whom served on the board of directors of Petrobras during the scandals, have both been blamed. This has sparked protests in Brazil.

The Bill and Melinda Gates Foundation sued Petrobras and its auditors, PriceWaterhouseCoopers as a result of the corruption scandal.

Environmental record

Petrobras has noted on its website several initiatives that it has taken to preserve the environment. These include sponsoring efforts to support both ocean and forest ecosystems.

Petrobras subscribes to the United Nations Global Compact, a voluntary agreement which encompasses a set of principles regarding human rights, working conditions, corruption, and the environment.

In 2008, the Spanish consultancy firm Management and Excellence acknowledged Petrobras as the world's most sustainable oil company.

Petrobras in popular culture