Reappraising Petrobr

News of Argentina's $1 billion worth of development contracts with foreign oil companies (TIME, Aug. 4) last week forced Brazilians to take a hard look at their own government oil monopoly, Petrobras. President Juscelino Kubitschek called the Argentine contracts "fabulous." Then he added pointedly: "Petrobras will be maintained, but any program to increase oil production well be wea received in Brazil."

Petrobras' shortcomings cannot be hidden. It produces 50,000 bbl. of crude oil a day. must import the other three-fourths of the 200,000 bbl. daily consumption at an annual cost of $250 million--roughly equal to the current year's trade deficit. All the oil comes from a single area in Bahia, and Bahia crude is heavy and high in paraffin content, useful mostly for waxes, asphalt and fuel oil.

Not even Petrobras' operational boss is very happy with its showing. He is blunt, able U.S. Oil Geologist Walter Link, 56, once chief geologist for Standard Oil (N.J.), who was lured out of semi-retirement in 1955 by a tax-free salary of $100,000, plus the promise of a free hand. He has put together 15 crack geologic field parties, ten gravimeter and 15 seismographic crews, 36 wildcat rigs. But so far he has not found a single economically operable well outside of Bahia, despite the fact that Brazil has some 1,350,000 sq. mi. of potential sedimentary deposits. The big snags are a mile of solid rock beneath the surface in potential oil lands and, above the surface, miles of red tape.

"I pound tables and raise hell to get things done," says Link. "When the directors say tomorrow, I tell them I'm camping right here until you get going." When he was hired, he told Petrobras brass: "I'm a capitalist and a strict believer in private enterprise. But leave me alone and I'll do the job." Link still feels that private foreign oil companies are needed in Brazil. "The more people you have looking for oil the better," he says.

Even before the Argentine agreements were announced, many Brazilians were criticizing Petrobras. In Sao Paulo, the authoritative daily Folha da Manha ran a public-opinion poll, found that only 11% were in favor of Petrobras as now run. More than 14% voted for strictly private enterprise, and more than 55% favored joint development by Petrobras and private foreign and Brazilian companies.

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