1953
Petrobras is founded
Brazil created a state oil company with a legal monopoly, betting that a country pumping little crude could one day fuel itself.
On October 3, 1953, Brazil founded Petróleo Brasileiro S.A., the national oil company known everywhere by its short name, Petrobras. It was created under President Getúlio Vargas and rode a popular nationalist campaign whose slogan declared, “The oil is ours.” The new company received a legal monopoly over the Brazilian oil business, an ambitious mandate for a country that was producing only about 2,700 barrels of oil a day.
The early years were about building the basic tools of an oil industry. Petrobras began processing oil shale the same year it was founded, developing its own extraction technology. In 1961 its REDUC refinery started operating near Rio de Janeiro, and in 1963 the company opened Cenpes, a research center in the same city that grew into one of the largest energy research institutions in the world. That same decade, a memorandum by the company geologist Walter K. Link argued that Petrobras would do better looking offshore than on land.
The advice proved prophetic. The 1973 oil crisis hit Brazil hard and nearly bankrupted the company, but in 1974 Petrobras found oil in the Campos Basin off the coast, a discovery that restored its finances and set the course for decades of deep-water exploration.
Why it matters
Petrobras turned Brazil into a major oil producer. It reached one million barrels a day in 1997, the same year a new law opened Brazilian oil fields to competition and ended the monopoly. In 2006 a new platform in the Campos Basin made Brazil self-sufficient in oil, and in 2007 and 2008 the company and its partners announced large finds in the Santos Basin, including the Tupi field. In 2010 it raised about 70 billion US dollars in what was then the largest share offering in history.
The company has also been at the center of national politics. The government still controls a majority of its voting shares, and the Operation Car Wash investigation, which uncovered bribes paid to Petrobras executives in exchange for inflated construction contracts, led to prison sentences for business leaders and politicians and fed mass protests across Brazil in 2016. Few companies anywhere carry as much of a country’s economic and political weight.
Did you know?
In 2000, Petrobras set a world record for oil exploration in deep water, drilling at a depth of 1,877 meters (6,158 feet) below sea level.
