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Brazil’s Supreme Court has approved an 8.6 billion dollar deal allowing state oil company Petrobras to sell its TAG pipeline network in a big win for the firm and the ruling party.
Any privatization of a state company must be put to a call for tenders and be approved by a parliamentary vote, the court ruled on Thursday, but it added that this does not apply to subsidiaries of these enterprises.
Judge Edson Fachin announced the raising of the suspension of the sale of Petrobras assets, put in place earlier in May while the decision was pending.
The Supreme Court rejected an attempt by oil industry unions to appeal against the sale of TAG.
The country’s far-right president Jair Bolsonaro and Economy Minister Paulo Guedes have launched privatisation projects and large scale concessions to reduce public debt since coming to power.
The projects would have been slowed significantly had the court ruled a parliamentary vote was necessary for the sale of all assets owned by the state.
Brazil has 134 state firms, including 88 classified as subsidiaries. Petrobras has 36 subsidiaries, Electrobras 30 and Banco de Brazil 16.
Heavily in debt, Petrobras hopes to sell $27 billion in assets and refocus its efforts on its oil related activities.
The TAG sale is the most important the state company has concluded to date, according to Bloomberg.
Petrobras has been entangled in a sprawling corruption scandal over the last few years, and hit by the fall in oil prices.Source: AFP