¹ In this paper, nationalism implies discrimination in favor of national interests as against foreigners or the community of nations as a whole; economic nationalism stresses the creation of an independent economy: Dernberger, Robert F., “The Role of Nationalism in the Rise and Development of Communist China,” in Johnson, Harry G., ed., Economic Nationalism in Old and New States (Chicago, 1967), 49.Google Scholar The event described below is uniquely Brazilian; the paper is thus a case study, and no wider comment is intended.

² Skidmore, Thomas E., Politics in Brazil, 1930–1964; An Experiment in Democracy (New York, 1966), 88–90, 164–65.Google Scholar For a more general view of economic nationalism, see Johnson, Economic Nationalism, particularly 1–3, 49, 126–28. Burns, E. Bradford, Nationalism in Brazil: A Historical Survey (New York, 1968)Google Scholar, is a brief overview which places economic nationalism in the context of Brazilian nationalism. For comments contemporary to the events described in this paper, see Jaguaribe, Hélio, O Nacionalismo na Atualidade Brasileira (Rio de Janeiro, 1958)Google Scholar, Cândido Antônio Mendes de Almeida, Nacionalismo e Desenvolvimento (Rio de Janeiro, 1963)Google Scholar, Sampaio, Alde, “Nacionalismo Econômico,” Digesto Econômico, XIX (January–February, 1962), 31–45Google Scholar, and “Situaçāo Econômica e Política de Desenvolvimento,” Cadernos do Nosso Tempo, 5 (1956), 67–119.Google Scholar

³ One of the earliest and most famous users of the term “the trusts” to describe large international firms, particularly those in oil, was Lobato, J. B. Monteiro, in his O Escândalo do Petróleo (Sāo Paulo, 1936)Google Scholar, which went through several editions. See also Cavalheiro, Edgard, Monteiro Lobato, Vida e Obra (Sāo Paulo, 1955).Google Scholar

⁴ Leite, Solidônio, O Petróleo e o Dever do Brasil (Rio de Janeiro, 1927)Google Scholar, passim (a collection of articles Leite wrote for the Jornal do Brasil early in the same year); Abreu, S. Froes, “Evoluçāo da Pesquisa de Petróleo no Brasil” Mineraçāo e Metalurgia, XI (July, 1946), 41Google Scholar; Lopes, Ildefonso Simōes, “Petróleo Nacional,” Revista do Clube de Engenharia, XXXVI (September, 1937), 1576.Google Scholar Foreign geologists were not prevented from exploring, but governments placed annoying, petty restrictions on them.

⁵ Wirth, John D., The Politics of Brazilian Development, 1930–1954 (Stanford, Calif., 1970)Google Scholar, covers this era well; see particularly chaps. 4 and 7. See also Távora, Juarez, O Petróleo do Brasil (Sāo Paulo, 1947), 14–20Google Scholar, and Abreu, Sílvio Froes, “O Problema do Petróleo no Brasil,” Revista Brasileira de Geografia, I (September-October, 1938), 53–54.Google Scholar

⁶ The most famous such promoter was Monteiro Lobato, who formed several companies during this decade based on an almost total ignorance of even the rudiments of petroleum geology. Yet to his O Escândalo do Petróleo must go credit for awakening Brazilians to their need for oil and to the lack of exploration to that time. He reasoned that Brazil must be saturated with oil, since neighboring republics all had oilfields and since Brazil had such vast sedimentary basins. See also Cavalheiro, , Monteiro Lobato, I, 415–489.Google Scholar For the case of the government geological service — which did indeed drag its feet on exploration, but from conservatism and lack of funds rather than because it was “in the pay of the trusts” — see Braga, Odilon, Bases para o Inquérito sôbre o Petróleo (Rio de Janeiro, 1936)Google Scholar, passim.

⁷ The National Petroleum Council (CNP), created by Decree-Law 538, July 7, 1938, was the expression of the Vargas regime's growing nationalism regarding oil and other natural resources. Patterned after Argentina's Yacimientos Petrolíferos Fiscales, the CNP was obviously envisaged as a supervisory agency rather than a company, to restrict foreign incursions rather than create an industry. The text of Decree-Law 538 may be found in Brasil, Ministério das Minas e Energia, Conselho Nacional do Petróleo, Legislaçāo do Petróleo (Rio de Janeiro, 1964), 22–30.Google Scholar It is noteworthy that this policy was instituted some months before any oil was found in Brazil; the “mistakes” Venezuela and Mexico had made were clearly not to be repeated.

⁸ Three offers were made, in 1940, 1941, and 1942, by Standard Oil of Brazil, acting for an unnamed company or companies. The proposals all envisaged a “partnership” between foreign capital and Brazilian government and private capital. Vargas and many in his cabinet were apparently tempted, but Gen. J. C. Horta Barbosa, CNP president, and the Army General Staff forced rejection on the grounds of national security; see Brasil, Câmara dos Deputados, Petróleo (Rio de Janeiro, 1956–1959), II, 304–317Google Scholar; Barbosa, Horta, Problemas do Petróleo no Brasil (Rio de Janeiro, 1947), 33–35.Google Scholar

⁹ The proposal, identified chiefly with Gen. Juarez Távora, a former tenente and Minister of Agriculture (1933–1934), and with Odilon Braga, Távora's successor as Minister of Agriculture (who at that time had jurisdiction over oil) until 1937 and a leading figure in the UDN (National Democratic Union, an anti-Vargas political party formed in response to democratization following World War II), would have allowed very limited foreign company participation in exploration and development; Ante-projeto do Estatuto do Petróleo com o Paracer do Relator (Rio de Janeiro, 1948)Google Scholar, passim.

¹⁰ Wirth, Politics of Brazilian Development, chaps. 8 and 9, examines these groups from 1947 to 1954.

¹¹ Skidmore, Politics in Brazil, 88–90.

¹² The original Petrobrás bill, Project 1516/51, and the debates over it in Congress, may be found in Câmara dos Deputados, Petróleo, VI–XII. Radical nationalism crossed party lines, and spokesmen for the exclusion of foreign capital from Petrobrás came from all three major parties (UDN, Social Democratic Party or PSD, and Brazilian Labor Party or PTB), The PTB was Vargas' personal party, but it contained radicals because of its labor orientation. The PSD was a party of old-style state politicians and moderately nationalistic businessmen (developmentalists), who had profited from the nationalism promoted during the 1930's. The UDN, while representing liberal businessmen who favored some measure of foreign investment, would endorse a radical stand on Petrobrás to discredit Vargas; Skidmore, Politics in Brazil, 54–57, 97–99; Wirth, Politics of Brazilian Development, Chap. 9; Gabriel Cohn, Petróleo e Nacionalism) (Sāo Paulo, 1968)Google Scholar, passim. Vargas' message accompanying Project 1516/51 and the separate bill setting out Petrobrás' financial basis, Project 1517/51, may be found in Vargas, A Política Nacionalista do Petróleo no Brasil (Rio de Janeiro, 1964), 77–101.Google Scholar

¹³ See note 2.

¹⁴ One of the most prestigious proponents of this view was Gen. Horta Barbosa, whose role as an oil nationalist has already been touched upon. Apart from the work already mentioned in note 8, see his “O Problema do Petróleo no Brasil,” Revista do Clube Militar, 83 (July-August, 1947), 93–95Google Scholar, and Nuestro Petróleo Debe Ser Explotado por el Gobierno (Buenos Aires, 1948)Google Scholar, passim.

¹⁵ See, for example, Artur Bemardes, in Câmara dos Deputados, Petróleo, VII, 496; Eng° Fernando Luiz Lôbo Cameiro, “O Brasil Pode, Ele Próprio, Explorar o Seu Petróleo,” Jornal dos Debates, August 22, 1947; Rafael Corrêa de Oliveira, “Petróleo, Monopólio e Imperialismo,” ibid., October 10, 1947.

¹⁶ Bernardes, , Câmara dos Deputados, Petróleo, VII, 496.Google Scholar

¹⁷ Ibid., XII, 175–183, 201–245, 290–95.

¹⁸ Brasil, Ministério das Minas e Energia, Conselho Nacional do Petróleo, Relatório 1954 (Rio de Janeiro, 1959), 69–168.Google Scholar The text of Law 2004 (creating Petrobrás) may be found in Legislaçāo do Petróleo, 170–194, and in Walker, R. G., “Government Oil Monopoly Confirmed in Brazil,” World Petroleum, XXIV (November, 1953), 118–122.Google Scholar While refining was part of Petrobrás' monopoly, the act was not made to apply to private refineries which already existed or were in the planning stage. Thus, four refineries limited to 55,000 barrels-per-day (b.p.d.) capacity were permitted to operate at various points throughout the nation.

¹⁹ This belief appears to have derived chiefly from Monteiro Lobato's O Escândalo do Petróleo, in which he noted Brazil's vast sedimentary basins, the prehistoric sea over Mato Grosso state, and the fact that almost all Brazil's neighboring republics had oil.

²⁰ Personal interview, Dr. Irnack Carvalho do Amaral, Rio de Janeiro, July 6, 1970. Dr. Amaral participated in Link's hiring, and has been associated with Petrobrás throughout almost all its history.

²¹ Última Hora, December 31, 1957; World Oil (August 15, 1958), 156; New York Times, January 5, April 17, 1955, February 9, November 19, 1957.

²² Skidmore, Politics in Brazil, 122–142.

²³ Ibid., 163–174.

²⁴ Ibid., 166–174.

²⁵ Última Hora, May 2; O Semanário, May 9–16, 1957.

²⁶ New York Times, June 30; Última Hora, June 24, 1957.

²⁷ O Jornal, October 27, 1957. The president was Army Colonel Janari Gentil Nunes.

²⁸ Diário de Notícias, April 8–May 31, 1958.

²⁹ Nunes had promised Minas Gerais a refinery, which he had no right to do; ibid., April 24, 1958. Col. Alexínio Bittencourt, CNP president, also charged Nunes with wasteful spending; ibid., May 7, 31; New York Times, August 21; Última Hora, November 4, 10, 1958.

³⁰ Jornal do Brasil, November 21, 1959.

³¹ Skidmore, Politics in Brazil, 180.

³² World Petroleum, XXIII (March, 1968), 36–38Google Scholar; Oil and Gas Journal (January 9, 1961), 58–59; personal interview, Walter K. Link, LaPorte, Indiana, September 16, 1966.

³³ Oil and Gas Journal (January 9, 1961), 58; Última Hora, November 24, 1960; Passos, Gabriel, “Nacionalismo e Riquezas Minerais,” in Passos, (ed.), Temas Nacionalistas (Sāo Paulo, 1961), 90–94.Google Scholar Link's bad image persists in Brazil.

³⁴ Última Hora, December 3, 1960. This daily (originally fostered by Vargas), with the weekly tabloid, O Semanário, led the denunciation of Link in the press. See Burns, Nationalism in Brazil, chap. 6, and Skidmore, Politics in Brazil, chaps. 5 and 6, for useful examinations of this period.

³⁵ Alfredo Marques Vianna, “Apresentaçāo,” in Vargas, A Política Nacionalista do Petróleo, 23–24; Gudin, Eugênio, Análise de Problemas Brasileiros, 1958–1964 (Rio de Janeiro, 1965), 380Google Scholar; Passos, Temas Nacionalistas, 10–11.

³⁶ Jornal do Brasil, May 27, Última Hora, January 9, 1962. Even such a radical-nationalist newspaper as the latter was upset over Passos' political meddling with Petrobrás.

³⁷ Jornal do Brasil, May 26–June 27, 1962, June 7, 1963.

³⁸ Última Hora, November 13, 18; New York Times, November 14, 1963. Although Goulart was able to forestall a threatened general strike on this occasion, he did agree to expropriate the private refineries “at an opportune moment.”

³⁹ Jornal do Brasil, September 23; Diário de Notícias, August 4; O Jornal, August 7, 1962; Annual Report of Petrobrás for 1962, cited in Jornal do Comércio, March 9, 1963.

⁴⁰ O Semanário, November, 1963; also General Tácito Freitas, Petróleo apesar de Mr. Link (Rio de Janeiro, 1964)Google Scholar, passim; personal interviews, Dr. Irnack Carvalho do Amaral, Rio de Janeiro, October 31, 1967, June 29, 1970. So far as I could discover, O Semanário was the only journal to give any detailed coverage to the report.

⁴¹ New York Times, December 25; Jornal do Brasil, December 24, 1963.

⁴² Jornal do Brasil, January 28, 1964; Skidmore, Politics in Brazil, 253–302, is an excellent analysis of Goulart's last days as President.

⁴³ New York Times, April 2, 1964.

⁴⁴ See, for example, Última Hora, January 25; Jornal do Brasil, January 26, 1964.

⁴⁵ New York Times, November 14, 1954. At the end of 1969 the federal government held 78.3 per cent of Petrobrás' common stock, subscribing 75.6 per cent of Petrobrás' capital from the sale of common and preferential stock. Private individuals held 7.7 per cent of common stock, with the remainder held by states, municipalities, and “public agencies;” Petróleo Brasileiro S. A., Relatório de Atividades 1969 (Rio de Janeiro, 1970), 53.Google Scholar

⁴⁶ Levy, W. J., Inc., The Search for Oil in Developing Countries; A Problem of Scarce Resources and Its Implications for State and Private Enterprise (Prepared at the Request of the International Bank for Reconstruction and Development, New York, 1960), 57–82Google Scholar, particularly 61.

⁴⁷ Jornal do Brasil, April 6, 1967.

⁴⁸ “Petrobrás at the Crossroads,” Petroleum Press Service (April, 1971), 139.

⁴⁹ Bonilla, Frank, “A National Ideology for Development,” in the American Universities Field Staff, Expectant Peoples (New York, 1967), 232–264.Google Scholar

⁵⁰ Earle F. Taylor, “Petroleum Exploration in Brazil,” Petroleum Engineer (October, 1949), B-40.

⁵¹ de Paiva, Glycon, “Princípios sôbre a Geologia do Petróleo,” Carta Mensal, V (January-April, 1959), 37–40Google Scholar; Link, Walter K., “What Are the Chances for Oil in the Sedimentary Basins of Brazil?,” Oil and Gas Journal (November 16, 1959), 289–294Google Scholar; Fernandes, Gerson, “O Problema do Petróleo no Brasil: Situação Atual e Possibilidades Futures,” Boletim Geográfico, XVII (November, 1960), 1010Google Scholar; Taylor, Earle F., “Geology and Oil Fields of Brazil,” Bulletin of the American Association of Petroleum Geologists, XXXIX (August, 1952), 1613–1626.Google Scholar The Recôncavo basin has an area of about 10,000 square miles. The sedimentary fill is deep, running possibly to 15,000 feet, with petroleum at several depths. Production from the Recôncavo for 1970 was 48,000,000 barrels, down from 1969's 52,000,000. This may be the start of a trend after years of increases and then stabilization; “Petrobrás at the Crossroads,” 139.

⁵² The approximate size of the territory to be explored is 1,300,000 square miles; Hartshorn, J. E., Oil Companies and Governments; An Account of the International Oil Industry in Its Political Environment (London, 1962), 227.Google Scholar

⁵³ Marinho, Ilmar Penna Jr., Petróleo; Soberania e Desenvolvimento (Rio de Janeiro, 1970), 414–17.Google Scholar

⁵⁴ Odell, Peter R., “The Oil Industry in Latin America,” in Penrose, Edith T., The Large International Firm in Developing Countries; The International Petroleum Industry (London, 1968), 274–75.Google Scholar

⁵⁵ Skidmore, Politics in Brazil, chaps. 5 and 6.

⁵⁶ Problemas do Petróleo no Brasil, 7.

⁵⁷ Radical nationalists consistently portrayed Petrobrás as “our symbol of economic emancipation,” a characterization which the company's public relations department kept before the public in the period under discussion (and still does). While Burns, Nationalism in Brazil (82–83), makes this point well, he credits Vargas with a more creative role in Petrobrás' formation than he actually played. For a more careful look at Vargas, see Wirth, Politics of Brazilian Development, 133–216, summarized well in 215–16.

⁵⁸ Wirth, Politics of Brazilian Development, 126–29, quote from 127. Wirth declares (126) that Volta Redonda “represented a new industrial era.”

⁵⁹ Wirth, Politics of Brazilian Development, 170; Tendler, Judith, Electric Power in Brazil: Entrepreneurship in the Public Sector (Cambridge, Mass., 1968), 2, 63.CrossRefGoogle Scholar The principal foreign-owned oil distributors were Standard Oil of New Jersey, the Atlantic Refining Company, Royal Dutch-Shell, and the Texas Company. The principal foreign-owned electricity distributors were the Brazilian Traction, Light and Power Company and the American and Foreign Power Company.

⁶⁰ Tendler, Electric Power, 213.

⁶¹ Ibid., 43–55, 79.

⁶² Ibid., passim.

⁶³ Breton, Albert, “The Economics of Nationalism,” Journal of Political Economy, LXXII (August, 1964), 376–386.CrossRefGoogle Scholar

⁶⁴ Lôbo Carneiro, “A Questāo do Petróleo no Brasil,” Jornal dos Debates, October 31, 1947, a speech before the National Students' Union on October 7, which appears to have galvanized that body into its very important active support of radical nationalism and Petrobrás.

⁶⁵ Personal interview, Gen. Juarez Távora, Rio de Janeiro, July 8, 1970.

⁶⁶ Skidmore, Politics in Brazil, 59, 65, 67, 73–79; Vargas, A Politico, 61–65.

⁶⁷ Vargas' bill would have allowed foreigners to hold one-tenth of 1 per cent of the voting stock; Vargas, A Política, 81–100; New York Times, December 7, 1951, January 4, 1952; Wirth, Politics of Brazilian Development, 194.

⁶⁸ Skidmore, Politics in Brazil, 122–142.

⁶⁹ Petroleó Brasileiro S. A., Petrobrás, VII (January, 1961), 4–5.Google Scholar This is the organ of Petrobrás' public relations department.

⁷⁰ New York Times, July 3, 1965; Jornal do Brasil, April 6, 1967.

⁷¹ Petroleum Press Service (April, 1971), 139, 141; “Brazil: the Petrochemical Industry,” B.O.L.S.A. Review, IV (June, 1970), 312–17.Google Scholar Petrobrás holds only 51 per cent of shares in Petroquisa, which is responsible for petrochemicals production in Brazil. Total investment by the end of 1970 was $200,000,000, and the greatest fear for the future seems to be excess capacity, if the market in Brazil and Latin America does not expand sufficiently.

⁷² Petroleum Press Service (March, 1971), 102.

⁷³ Production jumped from 2,000 b.p.d. in 1954 to 100,000 b.p.d. by the end of 1960, from 1 per cent to 45 per cent of consumption; reserves from 22,000,000 barrels to over 600,000,000 in the same time period; CNP, Relatório 1954, 180, 203; Walker, R. G., “Brazil's Oil Hunt,” World Petroleum, XXX (December, 1960), 66.Google Scholar

⁷⁴ Dechert, Charles R., Ente Nazionale Idrocarburi; Profile of a State Corporation (Leiden, 1963), 61–73, 100–108.Google Scholar “Petrobrás … is thinking of exploring abroad, either on its own or jointly with other companies. It has sent geologists to Ecuador and Iraq;” Petroleum Press Service (April, 1971), 139.