BRAZIL: Oil & Nationalism

The No. 1 propaganda success of Brazil’s outlawed Communist Party was the slogan O Petróleo é Nosso (The Oil Is Ours). Under that Communist-devised battlecry, Brazilian nationalists have blocked any foreign participation in the development of the nation’s oil. A product of the-oil-is-ours nationalism was Brazil’s 1953 law, which set up an oil monopoly, Petrobrás, and forbade ownership of shares by foreigners—or even Brazilians married to foreigners.

Currently producing only about 3% of its oil consumption, inflation-plagued Brazil has to pay out much of its desperately needed dollar income for petroleum imports. Many clear-thinking Brazilians, well aware that Petrobras lacks the capital and technical skill to undertake large-scale oil exploration, are convinced that the 1953 law stunts the nation’s economic growth. But nationalistic sentiment remains overwhelmingly strong. How strong it still is became evident last week in the Brazilian Senate, which voted on a bill to amend the Petrobras law and permit 30-year oil concessions to private Brazilian firms. The proposal made no mention of non-Brazilian capital, but it would presumably have permitted some participation by foreign oil companies through investments in Brazilian companies. Modest as the bill was, only five Senators of the 37 present dared vote for it. The oil is still all Brazil’s—and still in the ground.