Latest update April 24th, 2024 12:59 AM
May 05, 2019 News
By Kiana Wilburg
Even though Brazil’s state owned oil company, Petrobras, was implicated in one of the biggest corruption scandals in the history of Latin America, this did not stop the APNU+AFC Government from collaborating with the Brazilian firm.
In fact, representatives of Petrobras handed over a strategic plan to Government which speaks to the provision of technical assistance, export and import services and training.
At his most recent press conference, Energy Department Head, Dr. Mark Bynoe, confirmed that it was Guyana that reached out to the company. He said that Guyana contacted Petrobras through the nation’s Ambassador to Brazil, George Talbot.
Dr. Bynoe said, “We identified seven potential areas in which we could collaborate.” And for its official visit which was held last week at the Ministry of the Presidency, Dr. Bynoe said that Petro wanted to focus on two areas.
“They said they wanted to focus on the licensing round and their own expertise in deep water exploration.”
Kaieteur News subsequently asked Petroleum Advisor to Government, Matthew Wilks, why the government would engage one of the most corrupt oil and gas companies in the region.
To this, Wilks said, “It comes back to when we go to the license round. The Area C is an ultra deep block and there are very few
companies that can operate in that area. Only the majors can. And if you look at National Oil Companies, the only one that has the experience, and they have a lot of it, is Petrobras and they are obviously interested in it. (Petrobras) may form a consortium to do so.”
The Petroleum Advisor continued, “And if you are looking into the interest of the State in Area C, you want competent operators and for deep water areas. Only a small pool of people can do so.
“It is much deeper than Stabroek (which is operated by Exxon and partners). Stabroek is deep water and Area C is ultra deep.”
Wilks added, “Petrobras is world leader in this regard hence we are interested in Petrobras from a technical standpoint, from a technological standpoint.”
Pressed about the company’s track record of corruption, Wilks said he would not make a comment in that regard. He said, “I look at technical issues.”
CORRUPTION
Operation Car Wash is the largest corruption scandal in the history of Latin America. It started in 2014. The name was chosen because the alleged masterminds of the scheme used a currency exchange and money transfer service at the Posto da Torre (Tower Gas Station) and lava jato (car wash) in Brasília to move illicit payments.
At least eleven other countries, mostly in Latin America, were involved, and the Brazilian company, Odebrecht, was deeply implicated.
Initially a money laundering investigation, Operation Car Wash expanded to cover allegations of corruption at Petrobras where executives allegedly accepted bribes in return for awarding contracts to construction firms at inflated prices.
Petrobras delayed reporting its annual financial results for 2014, but in April 2015, it released “audited financial statements” showing US$2.1 billion in bribes and a total of almost US$17 billion in write-downs due to overvalued assets.
The corruption scandal grew in part because it challenged the impunity of politicians and business leaders that had prevailed until then. Structural corruption in the political and economic system, no longer tolerated or accepted, was being investigated and resulted in some criminal charges.
In fact, 93 officials were convicted including seemingly untouchable politicians like former presidents Luiz Inácio Lula da Silva and Dilma Rousseff.
According to BBC, Petrobras has since agreed to pay more than US$853M to the US and Brazil ending the long-running corruption investigation into the matter. (See link for more details: https://www.nytimes.com/2018/01/03/business/dealbook/brazil-petrobras-corruption-scandal.html)
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