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Petrobras Brandishes Its Corporate Blog

It's not often that companies engage in long-term battles with their home country's leading newspapers. But that's what's happening in Brazil, where a new corporate blog from one of the world's fastest-growing oil producers is sparking controversy.
/ Source: Business Week

It's not often that companies engage in long-term battles with their home country's leading newspapers. But that's what's happening in Brazil, where a new corporate blog from one of the world's fastest-growing oil producers is sparking controversy.

Petrleo Brasileiro (PBR), or Petrobras, is Latin America's largest publicly traded company, with a market cap of some $200 billion. It's also currently the star of oil companies traded on the New York Stock Exchange: The company's ADRs are up 50% this year, largely because of excitement over its huge deepwater oil finds, the largest in the Western Hemisphere in three decades.

But as the state-run company grows, it is attracting the scrutiny of Brazilian investigative journalists and senators who worry that billions of petrodollars might be put to political use. And that's not sitting well with Petrobras CEO Jose Sergio Gabrielli, a left-leaning former economics professor and close adviser to Brazil's President, Luiz Incio Lula da Silva. While the Brazilian government holds 38% of the publicly traded Petrobras shares, it controls 55% of the voting rights.

In May, the Brazilian Senate launched an inquiry to determine if Petrobras had evaded more than $2 billion in taxes by channeling funds to nongovernmental organizations [NGOs] run by political allies of President Lula in the runup to next year's presidential elections. It also started looking into alleged overpayments for ships and pipelines. That's when Gabrielli -- frustrated by newspaper reports that he complained were tendentious and quoted him out of context -- ordered his public relations team to create a blog called Petrobras -- Facts and Figures.

"We're Going to Defend Ourselves"

Gabrielli says he personally signs off on many of the company's daily postings on the blog, which is published only in Portuguese. The idea is to rebut what he calls "false information" in the Brazilian press about the company. But the site, which has had more than 1.5 million visitors, is raising questions about whether one of the region's most respected state-run companies is harming its reputation by being so combative. "We're going to defend ourselves," Gabrielli told a reporter from leading newspaper Folha de So Paulo in late June, in a Q&A posted on the blog. "Attacking is also part of defending oneself."

One of the first things the Petrobras blog did was to publish the entire transcript of an interview Gabrielli granted to a major newspaper -- before the newspaper's article appeared. That infuriated journalists throughout Brazil, who claimed that their questions are the intellectual property of their publications -- and in any case, out of courtesy, should not be aired before an article appears in print.

Petrobras agreed to wait until midnight before an article's publication to post transcripts on the Web, but it still takes a no-holds-barred approach to rebutting, point by point, every major news report.

Petrobras avoids making inflammatory statements about journalists in its daily postings. But its pointed rebuttals spawn vociferous reader comments that accuse journalists of working for political parties or belonging to a conspiracy to turn over Brazil's oil riches to foreign oil companies. One blog post by a reader identified as Da Torre said that "the Folha [de So Paulo] never tires of making up facts to denigrate Petrobras' image. Could it be that they are working for the multinationals to knock Petrobras down and grab the best thing Brazil has, its oil?"

Parody Blog Site Counters Petrobras

The National Newspaper Assn. called the blog an "awkward attempt to intimidate newspapers and journalists," and an editorial in the O Globo newspaper said Petrobras was trying to corral journalists in an "aggressive, unethical, and illegal way."

Andre, a 24-year-old college student majoring in marketing and publicity, started his own blog as a parody of the Petrobras site. "Petrobras wanted to start a war with the press and in that war, I am on the press' side," Andre said in an e-mail interview, asking that his last name not be published because he hopes to get a marketing job when he graduates. "It's O.K. for a state-run company to have a blog," he says, but Petrobras' blog "is political, not business."

Andre's own blog, which has had 50,000 visitors and 1,600 comments since he launched it June 7, has received numerous strident comments in favor of Petrobras that, judging from their IP addresses, appear to have been sent from the company's offices. But he has also gotten comments from Petrobras employees who said they were embarrassed by the one-sided approach taken by their company's blog. And Andre says he knows of many people who have tried to post negative comments on the Petrobras blog, but their words never appear.

erico Monte, a spokesman for Petrobras, denies that critical blog comments are censored, but he acknowledged that just 20% of the Petrobras blog posts are negative. A moderator removes "aggressive political messages" that have nothing to do with Petrobras, he says.

Unapologetic, Gabrielli Twitters, Too

Rosental Calmon Alves, former executive editor of the Jornal do Brasil newspaper and now a professor at the University of Texas at Austin, says Petrobras risks tarnishing its reputation if it continues the blog's contentious tone. "It's completely legitimate for them to create a direct channel of communication with the public, but they did it as a sort of vengeance against very qualified investigative journalists who were just doing their duty," he says.

Gabrielli is unapologetic. In a July interview with BusinessWeek, he said it's important for Petrobras to communicate directly with the public, to combat what he called "distorted information that the press presents."

Gabrielli adopts the blog's combative tone on Twitter, @jsgabrielli, where on Aug. 22 he complained to his 817 followers about an article published that day by Folha de So Paulo about the Senate inquiry. The newspaper, he Twittered, "knows how to put together partial truths to tell lies."

Petrobras has long been a source of national pride. Last year the company announced it had discovered 8 billion to 12 billion barrels of oil and gas below a thick layer of salt deposits more than three miles below the ocean floor. The huge reserves -- the largest discovery in the Western Hemisphere in three decades -- could turn Brazil into one of the world's biggest oil producers and exporters.

Despite the controversy, Petrobras is a pioneer of sorts. Relatively few large companies around the world publish blogs, says Steve Rubel, director of Insights for Edelman Digital, a unit of the big public relations firm. Most companies, he says, have opted to use Twitter or Facebook to send out shorter, softer messages to the public.

Chris Brogan, a leading Boston-based expert on social networking on the Internet, says Petrobras seems "to be acting as a lobbyist for themselves, very much in the vein of political blogging." That's fine, he says, as long as the blog is a dialogue, not a monologue. "There's a creeping scenario," he says, "where people will use the new technologies like a bullhorn, shouting loudly at the audience, instead of like a telephone, where they can have a dialogue."