ENERGY ADVISOR a WEEKLY PUBLICATION of the DIALOGUE September 16, 2016

LATIN AMERICA ADVISOR ENERGY ADVISOR A WEEKLY PUBLICATION OF THE DIALOGUE www.thedialogue.org September 16, 2016

BOARD OF ADVISORS FEATURED Q&A TOP NEWS Mary Rose Brusewitz Partner, OIL & GAS Strasburger & Price Can Temer Boost Jeffrey Davidow Lula Charged Senior Counselor, in Petrobras The Cohen Group Brazil’s Struggling Graft Case Ramón Espinasa Consultant, Brazilian prosecutors on Inter-American Development Bank Energy Sector? Wednesday ﬁ led charges against Luis Giusti former President Luiz Inácio Lula Senior Advisor, da Silva, his wife and six others Center for Strategic & in connection with the massive International Studies corruption scheme at state-run oil Jonathan C. Hamilton company Petrobras. Partner, Page 2 White & Case Raul Herrera Partner, POWER SECTOR Corporate & Securities Practice, Arnold & Porter IEnova Plans to James R. Jones Raise Over $1 Bn Chairman, ManattJones Global Strategies in Share Off ering

Jorge Kamine Brazilian President Michel Temer has vowed to implement policies with the goal of attracting Mexican energy infrastructure Counsel, investment in the energy sector. // File Photo: Brazilian Government. company Infraestructura Energet- Skadden Arps ica Nova plans to raise more than Craig A. Kelly $1 billion in a secondary share of- Michel Temer was sworn in as Brazil’s president on Aug. Director, fering next month, which would be Americas Int’l Gov’t Relations, 31, replacing ousted President Dilma Rousseff. How will one of the biggest Mexican equity Exxon Mobil the change in government, which puts Temer in power until placements in recent years. Jeremy Martin Q Page 3 Director, 2018, affect Brazil’s struggling energy sector? Will the Te- Energy Program, mer administration be able to work with Congress and turn the page on Institute of the Americas Petrobras’ protracted corruption scandal? What energy policy changes OIL & GAS Larry Pascal Chairman, are expected to come from a Temer government? PDVSA Proposes Americas Practice Group, Haynes & Boone $7 Bn Debt Swap Charles Shapiro Johanna Mendelson Forman, senior advisor with the Man- PDVSA President Eulogio Del President, aging Across Boundaries Initiative at the Stimson Center: Pino on Tuesday announced a World Affairs Council of Atlanta proposed $7 billion bond swap in R. Kirk Sherr “President Michel Temer’s business-friendly Brazilian Demo- outstanding debt in order to ease President, cratic Movement Party may not be enough to help him rebuild cash-ﬂ ow concerns for the state Clearview Strategy Group A the struggling energy sector in Brazil. Caught in a crisis of legitimacy, oil company. Garrett Soden Page 2 Director, Temer’s troubles with the Lava Jato legal investigation will not go away Etrion Corporation just because he was able to rid himself of Rousseff. The investigation has Mark Thurber revealed the connections between his party and the Workers’ Party to si- Partner, Andrews Kurth phon billions of dollars from Petrobras. Future outcomes in the corruption Alexandra Valderrama probe ultimately will not only affect the energy sector, but will also further Manager, International Government Affairs, erode the limited legitimacy that Temer and his government enjoy with Chevron ordinary Brazilians. Months before Dilma’s removal from ofﬁ ce at the end Lisa Viscidi of August, many international oil industry analysts thought that a change Program Director, Inter-American Dialogue in government would open a new chapter in Brazil’s energy sector. But the Max Yzaguirre scope of reforms needed may far exceed the government’s capacity, given President and CEO, the high level of distrust in Congress and in President Temer’s capacity The Yzaguirre Group to effect change. If Temer is able to set a reform agenda for Petrobras, he will face hostility from the Workers’ Party in Congress in making any Del Pino // File Photo: Venezuelan Government. Continued on page 3

OIL & GAS SECTOR NEWS million more for planned crude imports than it NEWS BRIEFS had originally anticipated, according to internal PDVSA Proposes documents seen by Reuters, the wire service Argentina’s Aranguren reported Tuesday. Despite holding some of the Sells Stock in Shell $7 Bn Debt Swap world’s largest crude reserves, Venezuela in March made its fi rst crude purchase from BP Argentine Energy Minister Juan José Aranguren Amid Cash Shortage in order to dilute its own extra-heavy crude. has sold his stock in the energy company Royal Venezuela awarded BP a large tender, for which Dutch Shell, President Mauricio Macri con- Venezuelan state-run oil company PDVSA on the South American country had expected to fi rmed Tuesday to La Nación. The announce- Tuesday proposed a $7 billion bond swap in pay $230.9 million, or approximately $31 per ment comes after the country’s anti-corruption outstanding debt in order to ease cash-fl ow barrel, in prepaid shipments of 7.4 million bar- offi ce called on Aranguren to sell his shares concerns, Reuters reported. Following PDVSA rels. Venezuela’s delays in payments, however, in the company to avoid a confl ict of interest, President Eulogio Del Pino’s announcement had prevented BP from sending its crude to though Macri maintained that the minister sold of the program, the company’s bonds surged Venezuela on time, which resulted in BP repric- his shares “by his own volition.” Aranguren ing some of its cargoes, as well as charging served two years as head of Shell Argentina PDVSA for keeping vessels offshore. until 2015, when he left after 37 years, and They are doing this later was appointed energy minister by Macri in because they don’t have Brazilian Prosecutors December. other choices.” — Russ Dallen Charge Lula in Petrobras’ Pre-salt Petrobras Graft Case Oil & Gas Production Wednesday as investors bet that the debt-swap plan would bolster fi nances, The Wall Street Brazilian prosecutors on Wednesday fi led Grows 4 Percent Journal reported. The program would allow charges against former President Luiz Inácio Petrobras’ oil and natural gas production in bondholders to exchange debt maturing in Lula da Silva, his wife and six others in con- pre-salt fi elds grew by 4 percent last month to 2016 and 2017 for debt due in 2020. Detailed nection with the massive corruption scheme 1.36 million barrels of oil equivalent per day, terms on the program have not been disclosed. at state-run oil company Petrobras. In a news the state-run oil company announced Monday. The company had been racing to increase its conference, Public Prosecutor Deltan Dallagnol The new monthly record was attributed mainly cash fl ow amid reduced output, a global de- alleged that Lula was the mastermind behind to the connection of new wells as well as in- cline in oil prices and approximately $8 billion the scheme that siphoned some 6.2 billion creased production in wells already connected worth of debt maturing in 2016 and 2017, with reais ($1.9 billion) from the state oil company, to fl oating production storage and offl oading the majority due later this year. “They are doing The Wall Street Journal reported. Some of the vessels Cidade Maricá and Cidade de Saquare- this because they don’t have other choices,” money, prosecutors allege, was directed to Lu- ma in the Lula fi eld of the Santos Basin. said Russ Dallen, a managing partner at la’s Workers’ Party and its allies in an effort to Caracas Capital, an investment bank. The debt keep the then-ruling party’s coalition in power. swap is expected to reduce the oil company’s “He was the conductor of this criminal orches- near-term payments, and may help Venezuela’s tra,” Dallagnol said Wednesday of Lula, Reuters Pemex Discovers Six sovereign standing. It’s not clear, however, that reported. “The Petrobras graft scheme aimed New Crude Deposits the debt swap will be enough to “offset the at keeping the Workers’ Party in power by in the Gulf of Mexico worsening political situation,” when it comes to criminal means.” Lula has consistently denied Mexican state-run oil company Pemex has Venezuela’s sovereign rating, said Jaime Reus- wrongdoing, and his lawyers said Wednesday discovered six new offshore deposits of light che, an analyst at Moody’s Investors Service. that prosecutors lacked evidence to support crude oil, the company announced Tuesday, The cash shortage has impaired the company’s the charges. “This Lula-centered farce was The Wall Street Journal reported. The discov- ability to import much-needed diluents that trumped up as an affront to the democratic eries, which are located in the Gulf of Mexico, allow PDVSA to formulate exportable crude state and intelligence of Brazilian citizens,” likely contain between 190 and 220 million as well as produce refi ned products for the said one of the former president’s lawyers, barrels of oil equivalent. Pemex did not say country’s domestic market. Delayed payments Cristiano Zanin. The formal charges against when it will begin drilling the new wells. In for crude imports due to cash shortages have Lula and his wife focus on a more narrow alle- recent years, decreased revenue due to low oil been costly for the company, which will have gation—that the former president and his wife prices has led to severe budget and production to pay oil major British Petroleum at least $130 illegally received approximately $1.1 million cuts at the company.

COPYRIGHT © 2016, INTER-AMERICAN DIALOGUE PAGE 2 LATIN AMERICA ENERGY ADVISOR September 16, 2016 in improvements and expenses related to a RENEWABLES NEWS a “threat to the health and wellbeing of society,” beachfront apartment, paid for by construction EFE reported. The two Latin American nations giant OAS, which was seeking government con- join top polluters the United States and China, tracts, The New York Times reported. Lula has Brazil, Panama Ratify which both ratifi ed the deal on Sept. 3. To take denied ownership of the apartment. While Lula Paris Climate Accord effect, the deal must be ratifi ed by at least was previously implicated in the so-called “Car 55 parties to the United Nations Convention Wash” investigation of Petrobras, Wednesday Brazil and Panama on Monday both ratifi ed the on Climate Change, and the ratifying parties marked the fi rst time that prosecutors accused Paris agreement to fi ght global warming and must represent at least 55 percent of global him of being anything more than a benefi ciary, limit greenhouse gas emissions, bringing the emissions. The United Nations said that by the Associated Press reported. Judge Sérgio international deal closer to implementation, Sept. 7, 27 parties had ratifi ed the agreement, Moro, who has already sentenced several peo- Reuters reported. Brazilian President Michel amounting to 39 percent of global emissions. ple to long prison terms in connection with the Temer signed the ratifi cation after both houses Brazil accounts for approximately 10 to 12 Petrobras case, must now decide whether to of Congress approved it. Panamanian Presi- percent of global carbon pollution, while Pan- accept the charges against Lula and the other dent Juan Carlos Varela called climate change ama’s accounts for only 0.2 percent of global defendants in order to proceed to trial. FEATURED Q&A / Continued from page 1 major changes. Layoffs in the sector due Henrique Rzezinski, vice pres- POWER SECTOR NEWS to Brazil’s contracting economy, coupled ident of external relations at with external factors such as the contin- Parnaiba Gas Natural in Rio de ued decline in global oil prices, will make A Janeiro: “President Temer has IEnova Plans to Raise extracting the pre-salt oil even more costly, a historic chance to upgrade his biography, More Than $1 Bn at a time when Brazil’s economy is already in from the most unpopular president in Brazil’s recent history to the president who was able in Share Off ering to approve the vital reforms the country des- The scope of reforms perately needed. And this is the one simple Mexican energy infrastructure company Infrae- needed may far ex- choice he has to make: either run for re-elec- structura Energetica Nova, or IEnova, plans to ceed the government’s tion or use all his political capital to pass the raise more than $1 billion in a secondary share capacity.” reforms in Congress, even if it means paying offering next month, three individuals with the price of unpopularity. One of the vital — Johanna Mendelson Forman knowledge of the matter said, Reuters reported reforms is related to the energy sector. The Monday. The offering would be one of the regulatory and institutional framework has biggest Mexican equity placements in recent a recession. Without any regulatory changes to generally change in the following ways: 1) years. IEnova, a unit of U.S. energy fi rm Sempra to allow private-sector companies to work on rebuild Petrobras by selling assets to fi nan- Energy, has hired Credit Suisse and JP Morgan the pre-salt oil deposits currently managed cially equilibrate the company and changing to underwrite the offer, which will help fund the by Petrobras, there will be little incentive for governance in order to avoid corruption; 2) infrastructure company’s major investments. international companies to expand invest- reintroduce the concession regime in place A spokeswoman from IEnova declined to comments in the short term. Renewable energy, of the production-sharing regime, as was ment. Credit Suisse and JP Morgan declined to one of the hallmarks of Brazil’s energy the case with the very successful 1998 reg- comment as well. IEnova is part of a group of sector, will also be affected by the poor ulatory framework, when important results Mexican companies that pushed into the coun- economic outlook in the coming year. Wind were achieved for all players like Petrobras, try’s oil and gas industry after Pemex lost its energy, one of the fastest-growing energy the federal government, the states as well monopoly in Mexico’s 2013 energy reform. Last sectors, will suffer in the negative invest- as national and international companies; 3) year, IEnova purchased the 50 percent stake ment climate. Temer will have a tough time end Petrobras’ obligation to be the single owned by Pemex in pipeline company Gasoduc- selling this country to new investors and operator in the pre-salt as well as the 30 tos de Chihuahua for more than $1 billion, as making good on the country’s commitment percent minimum participation require- the state oil fi rm looked to shed its assets amid to reducing greenhouse gases by having 23 ment of Petrobras in all Joint Operations falling crude prices. IEnova has won other big percent of its energy coming from renewable Agreements (JOA); and 4) change the local contracts recently, and CEO Carlos Ruíz in July resources by 2030, as the economic and po- content rules and make them more realistic said the company would fund its expansion litical crisis continues to overshadow these for local industry ambitions. Several regula- through a mix of equity and long-term debt. types of policy goals.” tory changes have to be approved in order Continued on page 6

COPYRIGHT © 2016, INTER-AMERICAN DIALOGUE PAGE 3 LATIN AMERICA ENERGY ADVISOR September 16, 2016 emissions. Brazil has previously committed to cutting carbon emissions by 37 percent by THE DIALOGUE CONTINUES 2025 and by 43 percent by 2030, compared to 2005 levels. How Will Peace in Colombia Change IDB Among Backers the Country’s Energy Outlook? of $103 Mn Nicaragua Colombia’s government and suspended in Colombia a few years ago, Geothermal Project the FARC rebels on Aug. 24 even before the peace talks with the FARC Q announced they had reached started, and not because of the crude price The Inter-American Development Bank said fi nal agreement on historic drop. Oil companies reduced their activities Sept. 9 it would back a $103.4 million program peace accords following nearly four years due to the cumbersome conditions and to develop Nicaragua’s geothermal energy of talks in Havana. Although Colombian vot- requirements offi cially imposed on them. sector and the construction of transmission ers must approve the deal in a nationwide Besides obtaining governmental and envi- infrastructure for the Central American country, referendum, set for Oct. 2, the government ronmental authorizations, which may be very SeeNews reported. The IDB will lend $51.4 says a “peace dividend” could add a per- cumbersome, oil companies must secure million to the program, and another $25 million centage point or more to the country’s gross operative permits from native and Afro com- will come from the Korea Infrastructure Devel- domestic product. How would Colombia’s munities that, in several instances, lead to opment Co-fi nancing Facility in Latin America peace process change the outlook for the endless and costly negotiations. Moreover, and the Caribbean, which the IDB manages. country’s energy sector and chances for there are instances in which the oil authority The Clean Technology Fund and the Scaling Up production gains? Will foreign investors has withdrawn the operating authorizations Renewable Energy in Low Income Countries make big bets on Colombia’s oil and gas op- under claims that oil exploration activities Program will grant $17 million to the program, portunities, or, in a period of low oil prices, may damage the subsoil. Evidently, the with the remaining $10 million covered by will they seek to invest in more predictable present oil price structure becomes also a local counterpart funds. The money will be environments elsewhere in the world? Will very negative factor. The fact is that oil pro- used, among other things, to conduct site the energy sector, long a target of pipeline duction in Colombia has been declining for investigation in order to determine the viability sabotage and severe harassment of its the last two years, and it is calculated that of harnessing the geothermal potential in the employees, see a more favorable security present oil reserves should last around sev- Cosigüina fi eld in northwestern Nicaragua. The situation as a result of the accords? en years, if no major oil fi elds are discovered program will also help develop mechanisms and enter into production by then. Ecopetrol, to attract private investment in the country’s Jorge Lara-Urbaneja, partner the state oil company, would not change the geothermal sector. at Arciniegas, Lara, Briceño & picture; it is investing very small resources Plana in Bogotá: “The peace in oil exploration. But the assumption in the A process between the Colom- question is correct in that the oil industry POLITICAL NEWS bian government and the FARC should not must be rebuilt and, for that, the institutions substantially change the outlook for the must be back over the whole country.” Colombia energy sector. The ELN rebel Argentina, Britain group, rather than the FARC, has been attack- Agree to Joint Steps ing up the Coveñas pipeline since it was EDITOR’S NOTE: More commentary on this under construction. The ELN is far from even topic appeared in the Sept. 9 issue of the on Falklands initiating peace conversations. In reality, the Latin America Energy Advisor. energy sector grows only when there is solid Argentina and the United Kingdom on exploration activity. But oil exploration was Wednesday agreed to taking joint steps toward removing restrictions on a number of indus- and sustainable development of the Falkland tina Fernández de Kirchner restricted vessels tries in the Falkland Islands, according to a Islands,” the Argentine foreign ministry said in passing through Argentine waters to reach the joint communiqué from the two countries, a statement, adding that the governments will Falklands and when an Argentine federal judge The Guardian reported. Both sides agreed to discuss the areas of shipping, fi shing and oil ordered the seizure of $156 million in drilling “take the appropriate measures to remove and gas drilling. Tensions rose over the disput- equipment belonging to oil drilling companies all obstacles limiting the economic growth ed islands last year when then-President Cris- operating in the islands. But Alan Duncan,

NEWS BRIEFS Britain’s minister of state for foreign and ance it by 2020. Low copper prices have added commonwealth affairs, hailed the agreement a strain to government income and have led Restarting Talks May Take as a victory for Argentina’s new diplomatic to a widened budget gap, despite announced 10 Years if Colombians approach. “The measures agreed today demon- spending cuts in March. Chile is experiencing strate we can make progress through dialogue,” its third year of sluggish economic growth, and Reject Accords: de la Calle Duncan said in a statement, Reuters reported. the economy contracted for the fi rst time in six Top Colombian peace deal negotiator Humber- years during the second quarter of this year, to de la Calle warned Colombians to carefully when GDP shrank by 0.4 percent over the peri- consider their decision before voting in next od. Fiscal spending rose by 2.7 percent during month’s referendum, saying that if the public the same period, in an effort to counteract a votes against the government’s peace accord 0.4 percent drop in household spending. Fiscal with the FARC rebels, it could take 10 years spending will not be cut next year, but the gov- before new negotiations are started, BBC News ernment is hopeful that private investment will reported Wednesday. “The ‘no’ camp’s idea of help drive growth in the coming months. renegotiating seems like a massive mistake to me,” he said. “The risk is that if people vote Duncan // File Photo: British Government. Brazil’s Temer ‘no’, thinking this will bring about a renegotia- tion, it is certain that nothing will happen.” Launches The countries also agreed to allow more fl ights between the Falklands and Latin America. The Privatization Plan FIFA Suspends nations have disputed the islands for more than a century and fought a brief war over them Brazilian President Michel Temer on Tuesday Guatemalan Soccer in 1982. On Wednesday, the countries said they announced a sweeping privatization plan in an Federation will speed up the process of DNA identifi cation effort to revive the country’s economy, which is for unknown Argentine soldiers buried on the suffering its worst recession in decades. Under World soccer’s governing body, FIFA, has sus- islands who were killed in the war. the initiative, the government plans to sell pended the Guatemalan football federation, or licenses to operate energy and infrastructure Fedefut, over political interference, BBC News projects, Reuters reported. By March, Temer’s reported Thursday. FIFA said local authorities ECONOMIC NEWS government is also planning to sell operating had intervened in undermining a local commit- licenses for the airports in Porto Alegre, Sal- tee that FIFA had put in charge of running the vador, Fortaleza and Florianópolis. “We need game there, following a corruption scandal. Chile to Limit to open up to the private sector because the The national team and all of the Central state cannot do everything,” Temer told cabinet American country’s clubs will be barred from Investment to Boost members during a discussion of the plan, participating in international competitions, Spending on which is called “Project Growth.” Privatizations though senior FIFA offi cial Primo Coravo said that will include the construction and manage- the ban might not be immediate. Health, Education ment of airports, roads, railways, oil fi elds and mining facilities will occur by 2017 or 2018, Chile’s 2017 budget will limit state investment Temer said, the Associated Press reported. The Santander Rio Denies in public projects and increase funding to plan encompasses an “extraordinary opening” it’s Purchasing Citi’s health care and education reform, said Finance of the country’s infrastructure, he added. The Minister Rodrigo Valdés, Bloomberg News Argentina Operation government’s concessions for the projects will reported Wednesday. Overall fi scal spending have long-term fi nancing from state-run banks Banco Santander Rio on Wednesday denied will increase from last year, and investment in or will be fi nanced through bond sales on earlier newspaper reports that it had pur- public projects will not necessarily be cut, but capital markets, Wellington Moreira Franco, the chased Citibank’s retail business in Argentina, some projects may be reassigned or others government’s top offi cial for increasing private according to a letter from Santander to the will not start next year, Valdés added. The sector investment in the country’s infrastruc- Buenos Aires Stock exchange, Reuters report- government under President Michelle Bachelet ture, said Tuesday, Reuters reported. “We will ed. “Banco Santander Rio S.A. has not reached has expanded public spending since 2014, but restore confi dence by expanding the legal any agreement to buy the retail operations of the announcement refl ects the government’s security for investors,” he said. Moreira Franco Citibank in Argentina,” Santander said in the efforts to cut the so-called structural defi cit by added that the concessions will offer “realistic” letter. 0.25 percent of GDP every year in order to bal- rates of return.

FEATURED Q&A / Continued from page 3 LATIN AMERICA ENERGY ADVISOR is published weekly by the Inter-American Dialogue Copyright © 2016 to approve different modes of gas moneti- the sector—in fact he has done already, with zations such as gas to wire and others. In one trip to Asia under his belt, and another Erik Brand other words, it is a task for a statesman, not planned for the near future.” Publisher [email protected] a regular politician. History will tell us what kind of man Michel Temer is.” Clarissa Lins, founding partner Gene Kuleta Editor of Catavento Consultancy in [email protected] Isabella Alcañiz, assistant Rio de Janeiro: “The minister of Nicole Wasson professor of government and A energy that President Temer ap- Reporter, Assistant Editor politics at the University of pointed in May, Fernando Bezerra de Sousa [email protected] Maryland: “One of the areas Coelho Filho, was unknown to the sector. At A Michael Spak that will require the immediate attention of 32 years old, he is very young and has spent Editorial Intern the controversial new president of Brazil, the last decade as a congressman, following Michel Temer, is the country’s embattled the steps of his father, an infl uential senator. energy sector. Even before the impeachment His nomination was defi nitely seen as a Michael Shifter, President political one, losing space to more technical Genaro Arriagada, Nonresident Senior Fellow appointments that were expected in a sector Sergio Bitar, Nonresident Senior Fellow devastated by the previous government. Joan Caivano, Director, Special Projects Signals that Brazil Nonetheless, Coelho Filho has positively Kevin Casas-Zamora, Director, is cleaning up shop surprised energy experts. He nominated Peter D. Bell Rule of Law Program have been mixed.” renowned executives to the boards and Ramón Espinasa, Nonresident Senior Fellow Ariel Fiszbein, Director, Education Program — Isabella Alcañiz management of the two largest state-owned energy companies, Petrobras and Eletrobras, Alejandro Ganimian, Nonresident Fellow on top of appointing respected offi cials to Peter Hakim, President Emeritus technical positions at the ministry of energy. Claudio Loser, Senior Fellow Additionally, he initiated a very proactive Nora Lustig, Nonresident Senior Fellow against Dilma Rousseff was fi nalized, Temer dialogue with key stakeholders in order to Margaret Myers, Director, China and Latin America Program signaled that he would attempt to open the establish a roadmap for the energy sector. Manuel Orozco, Director, Migration sector to foreign investment in order to pay New priorities are being set: the fi nancial Remittances & Development staggering debts and revitalize energy giants restructuring of Petrobras, including divest- Jeffrey Puryear, Senior Fellow Petrobras and Eletrobras. These companies ments and partnerships; the end of the obli- Tamar Solnik, Director, Finance & Administration have been deeply troubled by corruption gation of Petrobras to be the sole operator Lisa Viscidi, Director, Energy Program scandals and falling international oil prices. of the pre-salt, which the Senate is likely to But signals that Brazil is cleaning up shop approve in late September; a new bid round Latin America Energy Advisor is published weekly, with the exception of some major have been mixed. Temer placed a young poli- for offshore fi elds in the fi rst half of 2017 U.S. holidays, by the Inter-American Dialogue tician with no technical background and little and the revision of the rules for local con- 1211 Connecticut Avenue NW, Suite 510 political experience in energy policy—albeit tent. These initiatives represent a completely Washington, DC 20036 Phone: 202-822-9002 www.thedialogue.org ISSN 2163-7962 from a powerful family—at the helm of the different scenario from the one in place until

Ministry of Mining and Energy. There have May—they require both that Petrobras have Subscription Inquiries are welcomed at been few serious attempts to push forward suffi cient room to maneuver, and that the [email protected] the investigation of corruption in Petrobras, private sector trust a government some- and Temer himself has been implicated in times tempted to act more politically than The opinions expressed by the members of the Board of the scandal. Temer will probably soon learn technically. I believe that the urgency of the Advisors and by guest commentators do not necessarily represent those of the publisher. The analysis is the sole that with a small percentage of seats in facts will be decisive in turning the Brazilian view of each commentator and does not necessarily Congress, it was much easier to whip up energy sector into one of the most attractive represent the views of their respective employers or fi rms. The information in this report has been obtained votes against an unpopular president in her in Latin America.” from reliable sources, but neither its accuracy and second term than it is to pass legislation on completeness, nor the opinions based thereon, are guaranteed. If you have any questions relating to the deregulation. With a signifi cantly polarized The Advisor welcomes comments on its Q&A contents of this publication, contact the editorial offi ces and tight domestic front, Temer will want section. Readers can contact editor Gene of the Inter-American Dialogue. Contents of this report may not be reproduced, stored in a retrieval system, to go abroad to seek foreign investment in Kuleta at [email protected]. or transmitted without prior written permission from the publisher.