Brazil oil reforms eclipsed by scandals: Update
Changes to rules governing Brazil's oil and gas sector are a key part of Temer's plan to attract investment. The oil industry's wish list for reforms includes a relaxation of strict local content rules that require projects to use domestically sourced goods and services; the elimination of a legal provision that mandates a minimum 30pc operator role for state-controlled Petrobras in all sub-salt projects; more flexible rules for oil transshipment in Brazilian waters; and clearer rules on unitization of interconnected oil fields.
A proposal that would allow firms other than Petrobras to operate sub-salt projects has already passed the Senate and is now under consideration in the lower house.
Temer's first month in office was marred by controversial cabinet appointments and the loss of two ministers over claims of interference in a broad investigation into corruption at state-controlled Petrobras. A third minister resigned today.
Despite the rocky start, many analysts had hoped Temer would galvanize political support in early June to push through unpopular austerity measures and oil industry reforms. But fundamental policy changes are eluding him so far.
Yesterday, Temer's government, and Brazil's political establishment as a whole, were rocked by new allegations that some 20 top politicians, including Temer himself, benefited from a scheme at Petrobras transportation subsidiary Transpetro.
In a plea deal with federal prosecutors, former Transpetro chief executive Sergio Machado said Temer helped arrange a bribe to finance the 2012 campaign of another politician of his Brazil's Democratic Movement Party (PMDB).
Temer says the allegations are "completely untrue" and that he has never acted outside the law.
Machado's leaked secret recordings already forced three of Temer's ministers to resign and the new allegations have sent shockwaves through his fragile administration.
Tourism minister Henrique Alves stepped down this afternoon, just one day after Machado's plea deal, which includes claims Alves received bribes in 2008-14, was made public by the Supreme Court.
The new crisis boosts the probability that suspended President Dilma Rousseff could survive impeachment proceedings now underway in the Senate. Temer took over for Rousseff on 12 May after the Senate opened an impeachment trial into accusations of a financial cover-up.
Until recently, Brazil?s political opposition appeared to have the two-thirds Senate vote needed to definitively unseat Rousseff in the middle of her second four-year term, but support has waned as new scandals test the credibility of the Temer administration.
A final vote on Rousseff's future in the 81-member Senate is expected to take place in August, a watershed moment that would coincide with the Olympic Games in Rio de Janeiro.
Since her suspension, Rousseff has come out in support of a plebiscite that would allow new presidential elections this year, a proposal a majority of Brazilians support, according to recent polls.
Rousseff's mentor and former President Luiz In?cio Lula da Silva, known as Lula, has a strong lead in most polls on hypothetical snap elections. Lula is also under investigation for his involvement with firms alleged to have diverted billions from inflated Petrobras' contracts.
New elections are still considered unlikely, but the scandals surrounding Temer have called into question his ability to muster the support for reforms seen as necessary to pull Brazil out of a deep economic morass.
The lower congressional house has been consumed by the process to definitively remove former speaker of the house Eduardo Cunha, Rousseff's nemesis who is also linked to Petrobras corruption.
Temer has a reputation as a political dealmaker, but deep divisions within his own party and the steady drip of damaging allegations have effectively thwarted policy making.
Комментарии