Bolsonaro Adviser Backs Freer Petrobras, Rules Out Privatization If Flávio Bolsonaro wins Brazil’s presidential runoff on Oct. 25, he will give the nation’s state oil company broad freedom to reshape its portfolio while seeking to bring more private investment into sectors dominated by the state-controlled oil producer, according to one of his energy advisers.

By Mariana Durao“What has been discussed about Petrobras is that it won’t be privatized. Period,” Alexandre Chequer, an energy lawyer advising Bolsonaro’s campaign, said in an interview in Rio de Janeiro. Privatizing the company was previously considered when Jair Bolsonaro, Flávio’s father, was Brazil’s president for four years until 2023.

The opposition candidate’s surprise first-round victory earlier this month sparked a rally in Brazilian assets amid expectations of tighter fiscal policy that could help bring down double-digit interest rates, as well as more market-friendly economic policies. Petrobras shares listed in Sao Paulo have jumped near 13% since Brazilians first voted for president earlier this month. That was almost twice the increase for Brazil’s main equities benchmark.

Decisions about Petrobras’s operations and portfolio should be left to its eventual future leadership, including where to invest and whether to buy or sell assets, according to Chequer. The advisor to Bolsonaro helped draft Brazil’s petroleum law and exploration and production contracts in the late 1990s. As a lawyer, he has advised on the share offering of power utility Eletrobras in 2022, now known as Axia, and represented buyers in some Petrobras asset sales.

Chequer said the campaign hasn’t discussed the state-controlled oil producer’s fuel-pricing policy, including whether to restore import parity. The adviser was particularly critical of Petrobras’ renewed push into fertilizers under incumbent President Luiz Inácio Lula da Silva, saying the company lacks expertise in the industry, signaling expansions in that area could come under scrutiny.

While Bolsonaro’s government program calls for “modernizing Brazil’s refining sector,” the campaign has yet to discuss changes to Petrobras’ role. Chequer believes the refining market relies too heavily on a single company. It also remains to be decided whether to revive the asset-sale program pursued under Jair Bolsonaro.

The advisor praised divestments for strengthening independent producers and called Petrobras’ decision to retain assets such as the Bahia Terra onshore oil cluster “purely ideological.”Petrobras and Braskem Bolsonaro’s campaign has also yet to discuss Braskem, the financially troubled petrochemical producer in which Petrobras holds a major stake. The company is negotiating with creditors to restructure its debt.

When asked about creditors’ pressure on Petrobras to inject capital into the petrochemical firm, Chequer said shareholders typically face dilution in a debt restructuring and that the government should instead focus on improving the broader business environment.

Over the past months Chequer, who described himself as a campaign volunteer, held more than 50 meetings with companies and industry groups such as fuels distributors “to understand what the government can do to boost investor confidence.”The goal of a Flávio Bolsonaro government would be to spur investment and competition by cutting regulatory costs and streamlining approvals, he said. Scrapping the current government’s 12% tax on oil exports is among the most concrete energy proposals in Bolsonaro’s plan.