Brazil’s Petrobras Registers R$3.76 Billion Loss in Q3

Despite recent company troubles, foreign investors continue to show interest in Brazil's oil giant.

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Brazil’s oil giant, Petrobras, registered a loss of R$3.759 billion during the third quarter of 2015. According to company officials the losses stem from the effects of the significant depreciation of the Brazilian real during the period and the reduction of oil exports.

Petrobras’ financial director, Ivan Monteiro, during Thursday’s press conference, photo courtesy of Agencia Petrobras.

“The results reflect an increase in net financial expenditures due to the devaluation of the Brazilian real and the increase of expenditures with interest rates,” said Petrobras officials on Thursday during a press conference to announce the results.

According to company officials, during the quarter there was an R$5.396 million increase in net finance expense in relation to the same period last year as a result of foreign exchange losses despite the one percent increase in crude oil an natural gas production and increased domestic demand.

Despite the loss, the company’s balance for the period between January and September is still positive, registering profits of R$2.102 billion. Company records also show that the loss is 29.6 percent lower than that registered during the same period in 2014, of R$5.339 billion.

The accumulated net income for the first nine months of the year was 58 percent lower when compared to the same period in 2014.

The company’s net debt was R$402.3 million as of September 30, 2015, a 43 percent decrease when compared to December 31, 2014, when the company registered a debt of R$282 billion.

In early October Petrobras announced a plan which would reduce investments made by the company by US$15.3 billion during the next two years. According to Ivan de Souza Monteiro, the company’s financial director, however, this has not discouraged foreign investors.

“We will be abroad next week and have a full agenda of those, company and investors, interested in having Petrobras as partners,” said Monteiro during the press conference. Company executives are expected to visit several countries among them Mexico, the United States, China, Canada and the UK.

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Samarco’s Toxic Mud Reaches Atlantic Ocean in Brazil

By Lise Alves on November 24, 2015

More than sixty million cubic meters of contaminated residues made their way down the Rio Doce River killing fauna and flora.

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The mud mixed with contaminated water that spilled from the dams near Mariana, Minas Gerais on November 5th, has reached the Brazilian coastline, affecting the waters of Espirito Santo state. The municipality of Linhares has placed warning sites on the sand stating that beaches are not safe for swimming.

Espirito Santo governor, Paulo Hartung and Environment Minister Izabella Teixeira walk along coastline already polluted with toxic mud, photo by Paulo de Araujo/MME.

According to Brazil’s Environment Minister, Izabella Teixeira, the mud should be spread over a nine-kilometer stretch of coastline. The official admits that many species of fish and plants will die due to the contaminated mixture.

“There are protective barriers and this will help minimize the impact on fauna, but we will see significant damage (to the region),” said Teixeira to journalists after surveying the area. “There is still a lot of mud coming down the river. We will be monitoring it for the next 90 to 120 days,” added the government official.

In what is being called the worst environmental catastrophe in Brazil’s history, more than sixty million cubic meters of residues from the Samarco mining plants flooded the small municipality of Bento Rodrigues on November 5th, after two dams collapsed. Since then the toxic mud has been making its way down the Rio Doce River traveling at least five hundred kilometers towards the Atlantic Ocean.

The beaches of Regencia and Povoação have been closed off and residents who survive on tourism and fishing are likely to be severely affected by the accident. According to local news reports, many bed & breakfast facilities have already started to close and tourists who planned to spend Christmas and summer vacation in the region have been canceling reservations.

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Rio’s VLT Train Completes First Test with Passengers

The test was accompanied by Mayor Eduardo Paes, who drove the train from Museum of Art of Rio (MAR) to the statue of Barão de Mauá.

By Shalina Chatlani, 

RIO DE JANEIRO, BRAZIL – The Vehiculo Leve Sobre Trilhos (Vehicle on Light Tracks) completed its first set of tests with passengers last week (November 22nd) in Praça Mauá, with the train reaching a distance of 150 meters. Mayor Eduardo Paes attended the test and even drove the train, with the guidance of a French engineer.

Image recreation of what the VLT trains and lines will look like on Av. Rio Branco, image from Porto Maravilha.

For the test, the VLT was stationed next to the Museum of Art of Rio (MAR), and with low speed moved to its final destination for the test, the statute of Barão de Mauá.

The first train for the VLT system, which receives electricity only from its tracks and does not need areal power cables, arrived from France and began testing back in July.

The VLT will connect Rio’s Centro, Port Zone and domestic airport Santos Dumont and is set to start circulating with passengers in April 2016. At the tests last week, Mayor Paes confirmed that work for the train is on schedule, saying “Soon, people will see the VLT on [Avenue] Rio Branco.”

According to government press, literary teacher, Catherine Schumann, took her students to see the event, and received permission for her and her students to be passengers during the test. “It was a very positive experience for its comfort and tranquility. The ride on the tracks is quite smooth,” said Schumann. “All transportation should be like this in Rio. Too bad its not.”

Of the 32 stations that are part of the light rail train system, only three (Rodoviária, Central and Barcas) will have turnstiles for entry and exit of passengers. For the remainder of the stops, the payment of the fare will be optional and voluntary, a situation that is unprecedented in the Brazil and will call upon the good faith of the population. “There will be ‘total freedom’, said Paes. “It is a cultural change. We are betting on respect from citizens. This experience in civility will be important.”

The estimated cost of the VLT is R$1.157 billion, with R$625 million supplied by Public-Private Partnerships (PPPs) and the remaining R$532 million coming from federal funds and the government’s growth acceleration program, better known as PAC (Aceleração do Crescimento). Completion of the work on the VLT lines is scheduled for 2016 before the Olympics and Paralympics games begin in the city.

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