BRAZIL: Whose Oil?

The hottest topic in Brazilian politics is oil. Nationalists explode at the thought of foreigners helping to find and tap the country’s petroleum resources. Army generals and Communists have joined in shouting: “O petrÓleo é nosso [the petroleum is ours].” The Brazilian Congress is now considering a bill that would severely limit foreign oil companies’ shares in any oil-refining ventures to 40%.

Last winter, Standard Oil Co. of Brazil, a subsidiary of Standard Oil Co. (New Jersey), hired an opinion-survey group to find out what Brazilians think of oil exploitation. The poll confirmed the belief that Brazilians favored government development of any oil the country might have; but it also showed that practically nobody had the vaguest idea of what it takes to discover oil and build an industry.

Breaking a 40-year public silence on Brazilian oil policy, Standard launched a $140,000 series of ads in 30 newspapers. In plain Portuguese, Brazilians were told that 98% of the oil they consumed was imported, that Standard had the know-how needed to build a complicated industry for Brazil. To show Brazilians that it takes more than a law to make an industry, Standard flew a dozen journalists to see its U.S. layout. After a tour from Louisiana derrick forests to a New Jersey cracking plant, one of the visitors said last week: “We have had absolutely no idea what an oil industry is.”

B,y the time Standard wound up the campaign’s “initial phase” last week, potent Press Lord Francisco de Assis Chateaubriand, owner of 29 newspapers and 24 radio stations, was beginning to talk like a believer in foreign participation. But many a newspaper reader was skeptical or confused. Asked one businessman: “What does the advertising prove?” A few thought Standard’s campaign had been aimed at making friends for its lucrative oil-import business rather than persuading Brazilians to let it open up oilfields. Standard’s new Brazilian boss, M. W. (“Johnny”) Johnson rejected that notion. “We’ll go on with this campaign till we win or lose,” he said. Meanwhile, Getulio Vargas’ 1938 decree prohibiting foreigners from exploiting Brazil’s natural resources remained the law of the land.