Missteps and Undervaluation: The Controversial Sale of Landulpho Alves Refinery to Arabs Under Bolsonaro Government


According to a recent study conducted by the Comptroller General of the Union (CGU), it has been claimed that the Landulpho Alves Refinery in Bahia, Brazil, was sold at an inappropriate time and with errors in the sales procedure. The study suggests that Petrobras, the state-controlled oil company, was sold to Arab investors for less than its market value during the tenure of the Bolsonaro government.

The Landulpho Alves Refinery, one of the largest refineries in Brazil, was sold to Mubadala Capital, an Abu Dhabi investment firm associated with the UAE royal family, for a price below its market value. The CGU audit report revealed that the refinery was sold for US$1.65 billion, which was considered to be less than the asking price. The deal was finalized in 2021, under the administration of President Jair Bolsonaro.

The report highlights that the sale of the refinery took place in November 2021, during the global COVID-19 pandemic. This period was deemed unfavorable for the sale, as the economic indicators used to determine the value of refineries were on a downward trend. Consequently, the refinery’s value was diminished, potentially leading to a sale price below its true worth.

The CGU research suggests that Petrobras could have postponed the sale and waited for oil prices to recover in the global market. Despite the market volatility, Petrobras took the risk of proceeding with the sale, including the binding proposal stage and negotiation phase, as stated in the report.

Furthermore, the study reveals certain problems with the methodology employed in the sale, which had not been used for the privatization of state-owned Brazilian firms before. Given the uncertain economic conditions, Petrobras could have waited for a more stable outlook. These inconsistencies in the sales process and timing raise concerns about the potential undervaluation of the refinery.

In addition to the findings related to the refinery sale, the study also discusses an unrelated issue involving former President Jair Bolsonaro. There are claims that members of the UAE royal family gifted expensive jewels to Bolsonaro during his presidency, including sculptures made from gold, silver, and diamonds, as well as a watch set with precious stones. This matter is currently being investigated by the Federal Police to determine if there is any connection to the refinery sale.

The CGU audit report has sparked significant public attention and criticism. Opposition leaders have raised concerns about the inconsistencies in the privatization process, arguing that it harms public assets and consumers. The Federal Police are now involved in the investigation, and CGU Minister Vinicius Marques de Carvalho has confirmed their participation in the audit.

CNN reached out to Petrobras’ current management and former President Jair Bolsonaro for comments on the CGU audit but has not received any responses. The article also attempted to contact Joaquim Silva e Luna, who was the head of Petrobras at the time of the refinery sale, but no information about his comments or viewpoints on the matter was provided.

As the investigation continues, it remains to be seen whether the allegations of an undervalued sale of the Landulpho Alves Refinery and the issue of the gifted jewels will lead to any tangible consequences or changes in the Brazilian political and economic landscape.

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