Brazil & Southern Cone - April 2012 (ISSN 1741-4431)

Edison Lobão, the energy and mining minister, insisted on 17 April before a public audience in the federal senate that Brazil was adequately prepared to deal with any potential oil spills in the offshore deepwater sector or any other exploration fields. The minister made his comments just days after the state oil giant Petrobras confirmed a crude leak in its Roncador field, in the deepwater Campos basin, which lies adjacent to the Chevron-operated Frade field at the centre of recent high profile leaks.

In late April 14 cabinet ministers will meet to agree changes to the National Contingency Plan, which will then be rolled out across the country. The plan is being updated at the request of President Dilma Rousseff after the authorities were found wanting for two years in a row when faced with torrential rains, mudslides and hundreds of civilian casualties. Lobão said that the Frade field leaks were “of no significance” to the amended plan, as the spill had not affected the Brazilian coast. He pointed out that the November 2011 spill leaked 2.4m barrels of oil over a period of 10 days in ultra deep waters, without any effect on coastal areas. By way of contrast, he noted that in the Gulf of Mexico disaster in 2010, in which 11 oil workers died, 4.9m barrels of oil leaked into the ocean over the course of 87 days. The minister explained that in the case of the Brazilian leaks the lack of a “published plan” did not mean that the government did not act. “There was an integrated federal government action”, he said, adding, “Back in 2006, Petrobras already prepared a contingency plan of the highest quality. In fact, that plan was the one used to help Chevron”.

No end in sight to corruption scandals

Senator Demóstenes Torres, of the right-wing opposition party Democrátas (DEM), quit the party on 11 April amid a mounting corruption scandal centred on his links with a former businessman, Carlos Augusto Ramos, who is currently imprisoned for running an illegal gambling/gaming mafia. He will retain his senate seat, as an independent.

Torres has long been a high profile anti-corruption crusader, making his fall from grace all the more spectacular. This fresh corruption scandal is damming for the DEM (formerly Partido da Frente Liberal), which is struggling to stay relevant in Brazilian politics. The DEM governor of the federal district of Brasília, José Roberto Arruda, was forced out in an equally high profile graft scandal in 2010.

The case erupted in March after the press leaked details of two federal police investigations into corruption and money laundering in the illegal gaming industry, Operation Monte Carlo and Operation Las Vegas. Wiretaps apparently turned up extensive links between Torres and Carlos Augusto Ramos, known locally as ‘Carlinhos Cachoeira’ (roughly, ‘Charlie Waterfall’). Torres is alleged to have lobbied on behalf of Carlinhos to regularise illegal bingo pools and slot machines, in return for personal gain.

The senator, along with the governor of Goiás, Marconi Perillo (of the opposition Partido da Social Democracia Brasileira), will be the subject of the new CPI, which should get underway in coming days. (Goiás is the state surrounding the federal district). José Roberto Arruda’s successor in the federal district, Agnelo Queiroz of the federally ruling Partido dos Trabalhadores (PT), may also be implicated. The executive dreads these CPIs, as they tend to politically polarise congress and delay the legislative agenda. The PT leader in the lower house, Deputy Jilmar Tatto, denied on 16 April that the Rousseff government had tried to prevent or delay the CPI. “The government did not try to put a lock on the CPI. That is legislative issue”, he stated, adding that likewise the PT was not working against the enquiry, “There is no position on the part of the PT not to have a CPI”.

• New royalties framework still pending

Lobão expressed government concern over the congressional delay in approving a new regulatory framework for the division of the offshore oil royalties between the three oil producing states and the rest of the federation.  “The government would like this to hurry along because we need to hold new licencing rounds”, he explained.  Deputy Carlos Zarattini of the ruling Partido dos Trabalhadores (PT), author of the draft bill, is due to present it to representatives of both oil and non-oil producing states on 24 April for discussions.