Petrobras says legalization of gas contracts hinders market opening

The state-owned company said recent decisions to suspend adjustments undermine legal certainty in the business environment and interfere with free price formation. Photo: André Motta de Souza / Agence Petrobras

Petrobras released a memo on Thursday (30) challenging preliminary injunctions that suspended gas price readjustments in four states. According to the company, the convictions prevent prices from adjusting to the current reality of the gas industry next year. “Petrobras specifies that it respects its gas sales contracts through a portfolio of offers made up of national production and imports of gas from Bolivia and liquefied natural gas – LNG. The strong demand for LNG and the limited international supply have led to a significant increase in the international price of the input, which increased by around 500% in 2021 ”, explains the state-owned company.

Also according to the press release, Petrobras claims to be engaged, “in good faith”, in negotiations for new contracts with several distributors for several months. “To offer better conditions to customers, Petrobras offered natural gas distributors products with terms of 6 months, 1 year, 2 years and 4 years and contractual mechanisms to reduce price volatility, such as the reference to LNG and Brent indices, the payout option and the ability to reduce volumes in longer-term contracts.

However, according to the state-owned company, despite the negotiation process carried out between Petrobras and the distributors, as provided for in any commercial relationship and in accordance with what is established in the public notices, the state-owned company was surprised by the judicialization of the issue. “Petrobras understands that these decisions undermine the legal certainty of the business environment, interfering with the free formation of prices, jeopardizing the implementation of the opening of the natural gas market in Brazil and attracting investments in the country, “said Petrobras, also guaranteeing that it will adopt all applicable legal measures in relation to the reported court cases.

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