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Petrobras’ Lesson From BP: Invest in PR

Petrobras: Oil, gas, and investments but little talk about safety.

Petrobras: Oil, gas, and new investments but little talk about safety.

Petrobras announced today the discovery of gas reserves in the Camarupin fields in the Santos Basin as well as the signing of a landmark $160 million-dollar deal with GE Oil & Gas to develop power turbines for offshore platforms. These announcements come on the heels of Tuesday’s press release by Brazil’s National Petroleum Agency (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis or ANP) announcing that the Franca sub-salt oil well, also in the Santos Basin, has the potential to produce up to 50,000 barrels of oil a day. Petrobras, as the primary beneficiary of any finds in Brazil’s Tupi oil field, is expected to gain the most from the ANP’s announcement.

Petrobras’ positive announcements come after a public backlash on offshore oil drilling following the BP oil spill. Petrobras was the second worst affected company by the spill after BP, seeing its shares drop value by nearly 25% in the first quarter of this year compared to BP’s fall of 30%. Petrobras was especially affected by the BP oil disaster because like BP it is one of a handful of companies specializing in deep-sea oil exploration and development.

Petrobras’ immediate lesson from the BP disaster and its subsequent handling seems to be clear – contract better PR. The company’s recent stream of good news also coincides with the hiring of global PR firm Hill & Knowlton who is expected to work with Petrobras’ communication teams as the firm intensifies its sub-salt oil drilling operations and expands its international presence. Hill & Knowlton’s (H&K) list of former notable clients and successful PR campaigns includes: The tobacco industry’s 1950s campaign to debunk the scientific links between smoking and cancer; the Bank of Credit and Commerce International’s spin campaign after being indicted on charges of drug-money laundering; and the Government of Kuwait’s “Citizen’s for Free Kuwait” campaign during the first gulf war, credited by the Center for Media and Democracy as being “the largest foreign-funded campaign ever aimed at manipulating American public opinion.”

As some commentators have noted, Petrobras’ announcements have offered little to no discussion on investments in safer drilling technology or improved response measures to disasters like BP’s. Petrobras’ failure to discuss improvements in safety is expected given the oil-industry’s historic under-investment in disaster-management or safer drilling techniques (assuming any exist).

As Petrobras increases drilling in the Santos Basin’s salt-bed and the firm expands its global operations, prepare to be enchanted by Hill &Knowlton’s PR gurus.

(Photo: Photo Agencia Brasil)



Rodrigo Camarena

Rodrigo is an analyst and consultant on Latin American business, politics and public policy. He is a graduate of the London School of Economics and New York University. Follow him on twitter @Ro_Camarena and find more articles by him by visiting: