Petrobras Magazine

From April 14-16, in Rio de Janeiro, Petrobras took part in the World Economic Forum - Latin America, sponsored by the World Economic Forum in partnership with the Brazilian Trade and Investment Promotion Agency (APEX-Brasil) and with the support of the Brazilian government, the Rio de Janeiro state government, and the company. On this occasion, the President of Petrobras, Jose Sergio Gabrielli de Azevedo, elected “Energy Community Leader 2009” at the World Economic Forum, which took place in Davos, was also the president of the roundtable that dealt with energy security on the 15th and was part of the plenary session “Solving the Energy Jigsaw Puzzle in Latin America” on the same day. In addition, together with more than 500 personalities, including heads of state, major company presidents, politicians, academics, and representatives of the press, coming from more than 35 countries, Gabrielli discussed “Implications of the Global Economic Crisis for Latin America,” the central theme of the event.

The Purpose of the Forum

The forum was based on five pillars: Proactive Response to Economic Deceleration, Constructing Relationships between Regions, Integration to Construct a Better Future, Public Policies for Sustainable Growth, and Challenges and Opportunities for a Green Development Cycle. The objective was to accumulate critical mass in order to analyze how Latin America should respond to the current economic crisis. After all, as stated by the director responsible for Latin America in the World Economic Forum, Emilio Lozoya Austin, “the region, with its immense wealth in natural resources and biodiversity, a young labor force, and relatively stable financial systems, has the capacity to face the current crisis successfully even if it must face the challenge of harmonizing economic expansion and social progress, in the long term.

The choice of Brazil to host the event was strategically planned, given the important role of the country in Latin America, with the largest territory, population, and biodiversity, as well as the ability to produce energy from clean, renewable fuels at competitive costs. In this context, the forum was opened by the President of Brazil, Luiz Inácio Lula da Silva, together with the President of Columbia, Alvaro Uribe. Federal, state and municipal government representatives of the country also honored the event with their presence.

In his speech, President da Silva said optimistically, “It is expected that Brazil, economically resilient, will be one of the first to emerge from the recession.”

The Energy Question

At the forum, large oil, gas, and energy companies, including producers, suppliers, and consumers, as well as those responsible for public policy in the energy sector, united to define how to face the challenges arising in the twenty-first century. They sought to develop an energy security model which would take care of the needs of the new era and of all the stakeholders involved in the energy question.

President Gabrielli summed up the global energy situation: “Until recently, the principal questions in the energy sector consisted of ensuring a balance between supply and demand and combating climate change. The global economic crisis, however, made everything more complex. It descended on the world and undermined energy security. There was a reduction in economic activity globally and the demand for energy fell significantly, which resulted in the energy sector being severely impacted. The sudden reduction in the price of a barrel of oil decelerated considerably the impulse until then being given to renewable energy sources,” he summarized.

The participants also reflected on the future. “Despite the economic downturn, the demand for energy will certainly increase in the medium and long terms. This scenario will intensify the production of energy derived from traditional fossil sources, such as oil, natural gas, and coal, and will dramatically increase the importance of clean energy sources on the global scene. We will need to resolve this equation,” Gabrielli pointed out.

Among the solutions presented, there was consensus on the following thought summarized by Gabrielli: “In view of the crisis, it is fundamental that the governments take a larger role in the energy scenario so as to ensure the necessary investments to supply future demand for energy from the traditional sources appropriately and in a way to reduce the current dependence on fossil energy sources. The energy companies also need to continue investing. The enterprises, consumers, and society in general will also have to do their part so that we are successful in changing the global life style and so that we ensure sustainability in social, economic, and environmental terms for the benefit of current and future generations. Cooperation is crucial so that each day the present scenario improves.. It may seem difficult, but proactivity will be essential to guarantee energy security in the coming years.”

Also emphasized was the need to develop human resources for the energy sector, where there is a shortage of qualified labor; to promote local content, that is, goods and services acquired in Latin America; to promote the energy integration in the region; and to invest in the diversification of energy sources, stimulating the production of biofuels.

Letter to Latin American Heads of State

Some points relevant to Latin America discussed at the forum were included in a document sent to the heads of state invited to participate in the summit meeting in the Republic of Trinidad and Tobago, also held in April. Among these points, it is worth highlighting the support expressed by the participants for the financing of programs and assistance policies for Latin American countries, especially for those most vulnerable, by international agencies and development banks; the need to increase short-term liquidity in the region by means of both bilateral and multilateral systems; the importance of reinvigorating global trade and investments, without trade barriers and protectionist measures; the need to expand social protection networks, such as programs to reduce poverty associated with the improvement of the educational system; the relevance of global cooperation in initiatives to minimize climate change by using clean technologies, by developing sustainable energy sources, by obtaining energy efficiency, and by the conservation of ecosystems.

The forum was also useful in another aspect. The participants established a dialogue with the purpose of giving assistance to the heads of state attending the Latin American summit meeting and others of global expression, and thereby facilitating the realization of the structural reforms needed for the full development of Latin America and attracting investment to the region. In this way, they believe, it will be possible to create in Latin America a more stable economy, which is energetically efficient and secure, as well as cleaner and more socially inclusive.