OPEC membership isn’t an option for Brazil, Petrobras CEO says

By Simon Casey on 12/5/2019

NEW YORK (Bloomberg) - While Brazil’s President Jair Bolsonaro recently welcomed an informal invitation to join OPEC, the boss of the country’s state-controlled energy company isn’t a fan of the idea and said it’s not a possibility right now.

“To be a member of OPEC, or not, is not an option that’s being considered by the Brazilian government,” Petrobras Chief Executive Officer Roberto Castello Branco said Wednesday in an interview in New York.

“I am a free marketer,” he added. “I am against cartels. Brazil can do better.”

He made the comments as the Organization of Petroleum Exporting Countries prepares to meet in Vienna Thursday to decide on whether to persist with supply curbs. A committee that oversees its deal with non-members including Russia recommended the wider group adopt a Saudi Arabian proposal and cut its output quota by 500,000 barrels a day, delegates said.

Brazil joining OPEC isn’t a new proposition -- former President Luiz Inacio Lula da Silva once toyed with the idea. Petroleo Brasileiro SA, as the state oil company is also known, has previously come out against the notion, saying its obligation is to investors and debt holders, and that the government doesn’t have the power to determine production levels of private operators.

Bolsonaro said in October he got the invitation after meeting with senior officials from Saudi Arabia including Crown Prince Mohammed Bin Salman. Brazil’s oil output is set to grow strongly in the next few years as more of its offshore reserves are drilled, giving the country increasing clout in the global market.

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