Reuters - Video

Edition: US | UK | IN | CN | JP

Video

Brazil: Petrobras shocks amid austerity gloom

Friday, November 11, 2016 - 01:48

President Michel Temer's government comes under more pressure over its austerity measures as rioters storm the National Assembly building to vent their anger - while state-run oil company Petrobras shocks the markets with a huge third-quarter loss where none had been expected. Hayley Platt reports.

▲ Hide Transcript

View Transcript

Angry scenes outside Brazil's National Assembly as state workers try to storm the building. They're protesting against harsh austerity measures imposed by President Michel Temer's government. Brazil's been stuck in deep recession since 2014. Falling oil prices hurting its commodity-led economy. That and a political crisis which saw its former President Dilma Rousseff ousted hasn't helped either. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "It's a major problem for Brazil if you don't have that popular support for the government, ordinary people are clearly unhappy with the direction of travel. Again the political uncertainty, can the government last, can it stay the course and that raises questions about the outlook for growth and whether it remains a viable investment." One firm that clearly thinks it is, Royal Dutch Shell. It plans to invest $10 billion in Brazil over the next five years. It says it's encouraged by a new bill which paves the way for foreign companies to explore lucrative new fields. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "It looks misplaced at the moment but I suppose over the longer term it could turn out to be a good move. But certainly it's not been the greatest time to be in Emerging Markets and that will be a major problem until Brazil sorts out it's government and its economic direction." Brazil's government is reforming the oil sector so it can be less reliant on state-controlled Petrobras. The oil giant surprising analysts with a massive loss in the third-quarter amid major impairment charges. They were expecting a profit. Instead it lost $4.9 billion - five times more than it did a year ago. The company blaming weak oil prices which pushed it to cut the value of its fields and other assets.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Brazil: Petrobras shocks amid austerity gloom

Friday, November 11, 2016 - 01:48