PRESIDENT Tinubu’s recent visit to Brazil has once again reignited talks for the return of Brazil’s state-owned oil company, Petrobras, to Nigeria, but concerns persist over the firm’s previous domestic corruption cases.
Brazil’s state-run oil company Petrobras, which left Nigeria five years ago, should be able to return quickly, Nigerian President Bola Tinubu told a press conference with his Brazilian counterpart, Luiz Inacio Lula da Silva during his recent two-day visit.
“We have the largest gas repository. I don’t see why Petrobras shouldn’t return as a partner in Nigeria as soon as possible,” Tinubu told a joint press conference with Brazilian President Luiz Inacio Lula da Silva in Brasilia on Tuesday, August, 26.
Many industry analysts believe that the return of the firm would open more doors for Nigeria’s deep-water off shore investments, although concerns of corruption still rears its head.
“We have been doing business with Petrobras. Petrobras is the closest in terms of deep-water off-shore exploration projects because their deep-water share lots of similarities with ours. We share the same climate and its going to be a good one because it will mean the huge investments of some multi-nationals like Shell, Exxon Mobil in our country,” an oil and gas governance expert, Najim Animasaun told The ICIR.
Former Chairman of Major Oil Markers Association of Nigeria (MOMAN), Adetunji Oyebanji, told The ICIR that their coming back could open more investment opportunities into several untapped marginal fields in the country.
“Their coming back means investments into marginal fields and new acreages. It means that people are having more confidence to invest in Nigeria’s economy. You could also see that emerging economies are also aligning to build their own economic network,” he said.
Despite the hope that the return offers with regard to investment in Nigeria’s oil and gas, there are some unanswered questions about how the firm exited Nigeria in 2020.
The ICIR reports that Petrobras left Nigeria in 2020 due to a combination of factors, partly as a result of financial struggles largely due to domestic corruption scandals which impacted its global divestments and streamlining of its global portfolio.
According to Britannica, Petrobras scandal, Brazilian political corruption scandal began in 2014 that involved the indictment of dozens of high-level business people and politicians as part of a widespread investigation alleging that many millions of dollars had been kicked back to officials of Petrobras, Brazil’s huge majority-state-owned oil company, and to politicians—especially members of the ruling Workers’ Party.
The malfeasance was revealed by a federal investigation begun in 2014 under ‘Operation car wash’
The massive scheme to defraud Petrobras—Brazil’s largest enterprise and a symbol of the country’s entrenched economic nationalism—did not fully come to light, however, until after the narrow re-election of President Dilma Rousseff on October 26, 2014.
By the time of her second inauguration, on January 1, 2015, Rousseff’s approval rating had collapsed to 14 per cent, with some two-thirds of Brazilians blaming her for Petrobras’s troubles.
Petrobras and follow-up reforms after scandals
It would be noted that the investigation about Petrobras neck-deep corruption which began in 2014, uncovered a giant conspiracy involving bribery, kickbacks, and money laundering.
Further findings showed that Petrobras executives and politicians colluded with contractors to receive illicit payments and bribes in exchange for inflated contracts.
The scheme involved billions of dollars and implicated dozens of senior politicians and businessmen.
Notable key players in the financial corruption include the former President of Brazil, Lula Da Silva who was later found guilty and was convicted of passive corruption and money laundering related to a luxury apartment received from Grupo OAS.
His conviction was later annulled due to procedural issues.
In a similar vein, the CEO of Odebrecht-Marcelo Odebrecht, a major construction firm, was sentenced to 19 years in prison on March 8 2016, for paying over $30 million in bribes to Petrobras executives.
The investigation involved cooperation with authorities from over 60 countries, including the US Department of Justice and the Federal Bureau of Investigation.
The consequences of this scandal led to a significant decline in Petrobras’ stock price, negative impact on the Brazilian economy, and increased unemployment rates.
The scandal, however, led to significant reforms and restructuring efforts within Petrobras, including the appointment of new leadership and implementation of new policies to prevent corruption.
Tinubu’s visit offers hope
On Monday, President Tinubu welcomed Petrobras imminent return to Nigeria, five years after the Brazil’s state-owner oil company halted it’s joint venture operations.
Nigeria and Brazil have a robust trade relationships, with Nigeria standing as Brazil’s 49th largest export destination.
Trade between the two countries peaked at nearly $2.1billion in 2024.
Brazil exported almost $1billion to Nigeria, primarily sugar and jams and imported $1.1billion, mostly fertilisers.
Bayo Onanuga, the special adviser to the president on information and strategy, said the decision would ignite Nigeria’s economy.
In a statement, Onanuga noted that, “Petrobras’ return to Nigeria offers hope for renewed economic cooperation, potential investment in Nigeria’s vast natural gas resources, and a strengthening of the two countries’ energy sector partnership.
“This collaboration is expected to foster economic growth, as Nigeria seeks to leverage its resources through partnerships with established international companies like Brazil’s state-owned oil giant.”
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.