An Assessment of the Brazilian State Ownership in Petrobras in Light of Public Choice Theory

Severin Berget

Student thesis: Master thesis


Since 2012, Petrobras and Brazil have been a hot topic in the world of oil and gas, as some of the world’s largest oil deposits ever discovered were found in the deep waters outside the east coast of Brazil. The discoveries are capable of changing both Brazil and Petrobras forever, as the prosperity of self-sufficiency and domestic growth are within reach, as long as they avoid the pit-falls along the way. The public ownership in Petrobras is in many ways unique, as it has evolved from a monopolistic giant, to a significant international player and from there further towards its initial legacy. Its history is full of political conflicts and nationalistic developments; its significance in Brazil is without a doubt monumental. The author wanted to further explore the fascinating history of Petrobras, and by doing so going further into the world of public choice theory. A history this complex and eventful, in a country with such strong nationalist and public believes was expected to be a good candidate for applying the different schools of thought within public choice theory. The thesis concludes that several of the theories put forward by Public Choice theorist can be applied when assessing the government ownership in Petrobras and the most important is that it has visualized that a company such as Petrobras, a major oil company, is very colored and influenced by the fact that it has been and still is a government owned company. The analysis of Petrobras showed a strong connection between the behaviors in government and the government owned company. Although, the review has shown that the theories have been useful in developing an understanding of how Brazil has developed its public ownership and what has been the key drivers. However, one should be aware that Public Choice theory often crosses over between different schools of thought and the result one develops can be subjective and exposed to the assumptions put forward by

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2015
Number of pages56