UK spent millions pushing Bolsonaro to privatise Brazil’s oil and gas

A major UK aid project in Brazil under its far-right president focused on “opening up” Brazil’s energy markets to provide “opportunities” for British business.

28 October 2022

Brazilian President Jair Bolsonaro at a re-election campaign rally in Guarulhos, Brazil, 22 October 2022. (Photo: Caio Guatelli / AFP via Getty Images)

  • Bolsonaro has promised to sell-off more state-owned companies if re-elected this weekend
  • Priority of UK aid was “gas market liberalisation” and “removing specific market barriers” in Brazilian energy
  • UK praised Bolsonaro’s “push on liberal economic reforms” and “drive to reform energy sector”
  • Britain used “strong links” with Bolsonaro government to promote privatisation 
  • Project aimed to “increase business opportunities in Brazil” for UK firms and resulted in “specific business wins” for British companies in Brazilian energy

The UK began its £56m aid project in 2018 with the stated aim of supporting “Brazil’s economic openness and sustainable infrastructure”.

Jair Bolsonaro, a former army captain with fascist politics, has been Brazil’s president since the start of 2019. 

He is running for re-election this Sunday against former president Luiz Inácio Lula da Silva who was in jail for the last election after a politically-motivated prosecution.

The UK aid project was divided into four parts but the “energy” plank was budgeted at £25m, close to half the total. It runs until early next year.

Its aim was “opening up Brazil’s energy markets”, project documents note, with a focus on oil and gas. “Opening up” is a euphemism often used to describe privatisation. 

The UK money was designed to create a “more competitive and efficient energy market” in Brazil, and push for “gas market liberalisation”, again euphemisms for privatisation. 

“The UK is well-placed to respond to the expanded opportunities that are likely to emerge if reforms in these sectors in Brazil are successful,” the British documents note


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Benefits of Bolsonaro

The UK saw the advent of Bolsonaro’s government soon after the programme started as a boon for British goals.

It said the programme had “experienced considerable change in the political context, as a result of changes in government in Brazil”.

“The Brazilian government’s policies have changed or become clearer,” it added. Under Bolsonaro “there has been a greater push on liberal economic reforms,” and the far-right president had begun “a drive to reform the energy sector,” it continued.

The UK team in Brazil was “able to respond effectively to this change as a result of…strong links” with Bolsonaro’s government.

Programme managers concluded that “critical areas of Brazil’s reform agenda can be amplified by targeted support from its partners, including the UK.”

The UK’s Brazil programme is run through the Prosperity Fund, which began as a cross-government pot of money with the stated aim to “remove barriers to economic growth” and “promote economic reform”. Its programmes are now run by the UK Foreign Office.

Declassified previously revealed how another UK aid programme, this time in Mexico, was set up in 2017 to take advantage of the historic privatisation of state-owned oil giant Pemex. 


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Brazil has 12.7 billion barrels of proven oil reserves, the second largest in South America after Venezuela. 

The industry is dominated by the state-controlled Petróleo Brasileiro S.A, better known as Petrobras, which has long had a virtual monopoly on oil-related activities in Brazil.

The state owns about 37% of Petrobras’ equity, but has slightly over half of voting rights.

Bolsonaro has pushed privatisation of state-owned companies since coming to power, including, this year, Electrobras, Latin America’s largest power utility. 

In 2020, Richard Gonzalez, CEO of Petro-Victory Energy, a Brazilian oil prospector, wrote that Bolsonaro was “encouraging foreign investment with an emphasis on the energy sector.” 

He continued that Bolsonaro had “created a more dynamic oil and gas sector, free of the Petrobras monopoly that defined the market for so long.”

In September 2021, soon after the UK aid programme began, Bolsonaro’s economy minister Paulo Guedes said they planned to privatise Petrobras within a decade.

The following month, Bolsonaro himself said the privatisation of Petrobras “is on our radar”.

Bolsonaro’s re-election plan states that his government “will proceed with reordering the state’s role in the economy, through privatisation and divestment of state-owned companies”.


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‘Specific business wins’

Bolsonaro’s privatisation push has provided an enormous opportunity for British and other foreign investors.  

The UK documents note the “increase [in] business opportunities in Brazil, including for the UK, by stimulating competition and removing specific market barriers.” 

They add: “The UK’s prosperity is promoted by opening markets, driving economic reform, and championing British business.”

This UK aid project had even “started contributing to specific business wins” for British firms in Bolsonaro’s Brazil, including a £22m UK investment in energy and a major contract for a Cornwall-based water company in Brazil.

The programme also had “significant soft power benefits,” with a UK official writing to the foreign secretary that “the Prosperity Fund has been a game-changer for our relationship with [Bolsonaro’s] powerful economy ministry, and across the Brazilian government”.

Brazil is the top destination for UK exports to Latin America and the UK is Brazil’s 14th top supplier. UK goods exports to Brazil more than doubled between 2005 and 2015.

The UK Foreign Office declined to comment for this article.