Petrobras of Brazil the Impact on the Pre-Salt Oil Wells

Abstract

First, the purpose of this paper is to investigate and examine a case study on Petrobras Brazil’s largest Latin-American state-owned oil company, its cost of capital, corruption, and the privatization of its growing pre-salt oil reserves. Next, the paper will be a qualitative research into the corruption scandal by Brazil’s former President Dilma Rousseff and the serious allegations. The government believes that she was part of the corruption not a part of the solution during her position as Chairman of Petrobras, which she has destroyed the brand name, as well as, drove the company into 130 billion dollar debt as of 2016. Hence, since the Petrobras inception in 1953 the state-own oil company now has 33% of the shares and 55% of the voting capital, which sends signals to the opposition they have the controlling rights to the company’s assets, as well as, the liabilities (Eiteman, Stonehill and Moffett, 2013).