The re-election of President Dilma Rousseff has set the stage for what looks likely to be another challenging four years for Brazilian state-run firms. Political risk tends to rise for Petrobras (PETR3:BZ, PBR:US) in election years and fall in non-election years, in tandem with the state imperative to use the firm to control inflation and to increase investments ahead of voting. But this time around, the company and the government now face the ticking time bomb of the widening Petrobras corruption scandal. Although the appointment of new management could help the firm to put the scandal behind it, this crisis shows no signs of abating soon. The scandal could widen to include Brazil’s overall oil & gas sector, the power sector (notably Eletrobras [ELET3:BZ, EBR:US]) and public pension funds. (Brazil 14 November 2014)
Formal impeachment began on 2nd December 2015. Rouseff removed from office on 12th May 2016.