April 13, 2020
State-owned company wants to extend terms and payments due to the fall in demand and oil prices. Sector fears shock over a chain of 500,000 workers
After cutting production and employee wages, Petrobras renegotiates contracts with major suppliers to further reduce costs. The goal is to extend delivery and payment terms. The movement worries specialists and companies. The state’s total chain has 12,700 suppliers and 500 thousand workers.
In the past few days, Petrobras sent a letter to its main suppliers stating that it would call on them to discuss the conditions of the contracts in force due to the pandemic, which brought down demand and oil prices, said the executive of a supplier company.
The problem is compounded by the fact that suppliers have already ordered supplies and services to meet contracts with Petrobras, recalled one executive. In addition, this happens as companies increase costs to deal with the effects of coronavirus.
Many of them, for example, are having extra expenses with ground freight, due to the cancellation of flights.
According to Gilson Freitas Coelho, executive secretary of ABESPetro, which brings together the 50 largest service providers in the sector, the state-owned initiative will shake companies whose margins have not yet fully recovered from the Lava-Jato crisis.
– Potential reductions in activity can have a major impact on the number of direct and indirect jobs in the chain – he warned.
Impact in the pre-salt
Another sector executive considered that, so far, the main pre-salt projects are preserved, including the Mero, Itapu and Búzios fields. This is because these projects “go through the feasibility cut line because they support low (oil) prices.”
But another executive in this chain said that this is not the case for all pre-salt projects. Areas that will require larger investments – such as Peroba and Alto de Cabo Frio Central and Oeste – go “to the end of the line”.
Petrobras confirms that it is in negotiations with its largest suppliers, justifying that this is necessary because of the abrupt reduction in prices and consumption. The company said it was adopting a series of cost reductions to reinforce “the financial strength and resilience of the business.”
“Given the complexity and diversity of the goods and services contracts, each case is being treated individually, always favoring the search for a negotiated solution”, explained the state-owned company in a note.
The gas and refining segment, which is part of the government’s plan to attract private investment, will also be affected. In the last week, Petrobras alleged a force majeure to buy less gas from the Manati field, formed by Enauta, Brasoil and Geopark, in addition to Petrobras itself.
– With less economic activity, the industrial sector consumes less gas, generating a chain effect. It is a time for everyone to seek flexibility and reach an agreement to lose less – said Rivaldo Moreira, from Gas Energy consultancy.
For João Almeida, partner at Demarest Advogados, this is the best way to avoid judicialization. He recalls that the Civil Code allows the review of contracts in cases such as the current one:
– The pandemic is a typical case of force majeure, but, by itself, it does not exempt companies from contractual responsibilities. It is necessary to see if this is hampering the fulfillment of the contract. But today, the watchword is to relax and reach an agreement that is less bad for both sides.
Source: O Globo