{"id":50015847,"date":"2018-12-20T11:36:04","date_gmt":"2018-12-20T11:36:04","guid":{"rendered":"https:\/\/stage.dialogochino.net\/?p=15847"},"modified":"2023-01-26T11:42:07","modified_gmt":"2023-01-26T11:42:07","slug":"15847-chinese-investment-brings-hope-to-a-fallen-city","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/energy\/15847-chinese-investment-brings-hope-to-a-fallen-city\/","title":{"rendered":"Chinese investment brings hope to a fallen city"},"content":{"rendered":"<p>After three years of struggle, Josu\u00e9 Ribeiro is finally hopeful again.<\/p>\n<p>He used to have a good job at oil refinery Comperj\u2019s construction site in Itabora\u00ed, Rio de Janeiro. But in 2015, as Brazilian prosecutors untangled a massive corruption scandal involving Petrobras, the state-owned company behind the project, construction ground to a halt. Thousands were fired, including Josu\u00e9.<\/p>\n<p>In March this year, however, things started to look up.\u00a0<a href=\"https:\/\/www.reuters.com\/article\/petrobras-natgas\/update-1-chinas-shandong-kerui-wins-587-mln-deal-for-petrobras-gas-unit-idUSL1N1RB0R0\">Petrobras hired a consortium led by Chinese company Kerui Petroleum<\/a>\u00a0to build a natural gas processing unit at the site. Slowly, workers returned.\u00a0<a href=\"https:\/\/www1.folha.uol.com.br\/mercado\/2018\/10\/chineses-terao-20-de-refinaria-do-comperj-diz-petrobras.shtml\">Then, in October, Petrobras signed a contract with China National Petroleum Corporation (CNPC) to resume construction<\/a>\u00a0of the refinery. Under the deal, CNPC would control 20% of the new facility.<\/p>\n<p>Though many celebrate the revival of economic activity after years of crisis, not all share the enthusiasm. Environmentalists are concerned about the pollution of air and waterways in\u00a0<a href=\"http:\/\/stage.dialogochino.net\/water-quality-will-improve-for-rio-olympics-officials-say\/\">Guanabara bay<\/a>, an area where contamination threatens the extinction of species such as the dolphin, a symbol on Rio\u2019s state flag. The refinery also raises questions about the long-term benefits to a region already highly dependent on oil.<\/p>\n<p><a href=\"https:\/\/extra.globo.com\/emprego\/conclusao-do-comperj-deve-gerar-8-mil-vagas-em-2019-23161674.html\">According to some estimates, Comperj will create between 8,000 to 10,000 jobs<\/a>. Around 800 are already working. Josu\u00e9 hopes he will soon be one of them.<\/p>\n<p>\u201cThis year, I\u2019m confident I\u2019ll get back in there,\u201d Ribeiro said. \u201cI think them [the Chinese] coming here will work out really well. I even think 20% is too little for them. Because Brazilians\u2026 Unfortunately, there is a lot of corruption.\u201d<\/p>\n<div class='cdo-shortcode--image'><\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/cz1ZwMt6IDY\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><\/div>\n<h2>A symbol of the downfall<\/h2>\n<p>Petrobras started building Comperj in 2008, bringing hope of development and employment to the region. Over 30,000 were employed at Comperj at the peak of construction. Back then,\u00a0<a href=\"https:\/\/economia.estadao.com.br\/noticias\/geral,lula-inaugura-obras-no-comperj-acompanhado-de-dilma,148668\">the government promised the project would bring over 200,000 direct and indirect jobs by its completion.<\/a><\/p>\n<p>\u201cI had a stable life,\u201d Ribeiro remembers. \u201cI got married, I built my house, I bought a car.\u201d<\/p>\n<p>The city\u2019s explosive upward trajectory paralleled Brazil\u2019s. The economy grew by over 5% that year.<\/p>\n<p>Then, in 2014, came Operation Carwash, a widespread corruption investigation that indicted over 100 top politicians and business executives. Petrobras was at its center.\u00a0<a href=\"https:\/\/www.nytimes.com\/2018\/01\/03\/business\/dealbook\/brazil-petrobras-corruption-scandal.html\">By its own calculations, the company had paid at least US$3 billion in bribes<\/a>.<\/p>\n<p>The investigation jailed many powerful men, including former president Luiz In\u00e1cio Lula da Silva, who was arrested last April under charges he still fiercely contests. Projects suspected of harbouring corrupt activities halted.\u00a0<a href=\"http:\/\/g1.globo.com\/economia\/noticia\/2015\/08\/impacto-da-lava-jato-no-pib-pode-passar-de-r-140-bilhoes-diz-estudo.html\">One study estimates the investigation\u2019s impact on Brazil\u2019s GDP to be around US$35 billion.<\/a><\/p>\n<p>Itabora\u00ed was among the cities hit hardest by Operation Carwash.<\/p>\n<p>\u201cIn a period of two months or so we lost 15,000 jobs in Comperj alone,\u201d says Paulo C\u00e9sar Quintanilha, president of a local union for Comperj workers.<\/p>\n<div class='block--pullout-stat block--pullout-stat--float cd-shortcode--factbox'>\n                <p class='block--pullout-stat__title'>17,000<\/p>\n                <div class='block--pullout-stat__content'>\n                     people unemployed in Itabora\u00ed\u00a0\n                <\/div>\n            <\/div>\n<p>The union estimates there are 17,000 people without jobs in Itabora\u00ed today. According to a report by news website\u00a0<em>G1<\/em>, 700 shops have closed, real estate prices fell 45% and levels of violence have shot up.\u00a0<a href=\"https:\/\/g1.globo.com\/rj\/rio-de-janeiro\/noticia\/comperj-com-obra-parada-e-desemprego-itaborai-fecha-mais-de-700-lojas-e-ve-violencia-crescer.ghtml\">Between March 2017 and March 2018, homicides in the city more than doubled.<\/a><\/p>\n<p>\u201cItabora\u00ed became a ghost town,\u201d says Quintanilha.<\/p>\n<div class='cdo-shortcode--image'><\/p>\n<p><figure id=\"attachment_20497\" aria-describedby=\"caption-attachment-20497\" style=\"width: 1000px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-20497\" src=\"https:\/\/dialogue.earth\/content\/uploads\/2018\/12\/Comperj-construcion.jpg\" alt=\"\" width=\"1000\" height=\"427\" \/><figcaption id=\"caption-attachment-20497\" class=\"wp-caption-text\">Construction is restarting at Comperj, which used to employ thousands (Image: Ministerio de Planificaci\u00f3n)<\/figcaption><\/figure><\/p>\n<p><\/div>\n<p>Now, Quintanilha is only cautiously hopeful. Hiring has restarted slowly, mainly in Kerui Petroleum\u2019s consortium with M\u00e9todo Engenharia, a Brazilian engineering company. The company now employs 500 people but says it should hire 2,000 more by the second half of 2019.<\/p>\n<p>Every morning, hundreds of men and women like Josu\u00e9 wait for good news outside the local unit of the National Jobs System.<\/p>\n<p>A few streets up, at the entrance of Kerui\u2019s building, young men come and go with paperwork in hand. They are being hired. None wanted to talk to\u00a0<em>Di\u00e1logo Chino<\/em>. They fear losing their cherished jobs. \u201cI don\u2019t know how the company will feel about me giving interviews,\u201d one said, as he left for a medical exam.<\/p>\n<h2>Strengthening bonds<\/h2>\n<p>Chinese investors have shown interest in\u00a0<a href=\"http:\/\/stage.dialogochino.net\/corruption-and-crisis-in-latin-america-open-door-for-more-chinese-investment\/\">a number of projects<\/a>\u00a0like Comperj that stalled because of Operation Carwash.<\/p>\n<p>For Charles Tang, president of the Brazil-China Chamber of Commerce, the new investments show just how much China is willing to back Brazil. In the first quarter of 2018, Chinese investment in Brazil more than quadrupled compared to the same period of 2017,\u00a0<a href=\"https:\/\/br.reuters.com\/article\/businessNews\/idBRKBN1JZ202-OBRBS\">reaching US$1.3 billion<\/a>.<\/p>\n<p>\u201cThere are so many big projects halted, basically getting rusty,\u201d he said. \u201cThen comes China once more willing to believe in Brazil and invest. That\u2019s the story of Comperj.\u201d<\/p>\n<p>CNPC\u2019s investment in Petrobras isn\u2019t its first. The two companies are already partners in the massive Libras oil field, located in ultra-deep waters off the Brazilian coast. However,\u00a0<a href=\"https:\/\/www.reuters.com\/article\/us-petrobras-china-investment\/petrobras-cnpc-talks-put-china-closer-to-first-americas-refinery-idUSKBN1JU1UM\">Comperj would be China\u2019s first refinery in the Americas.<\/a><\/p>\n<p>\u201cThis is a sector that receives very little attention and this movement shows it could attract new companies,\u201d says Edmar de Almeida, an economics professor who studies the energy sector at the Federal University of Rio de Janeiro. \u201cWe need more investment in refineries.\u201d<\/p>\n<p>Almeida says most foreign companies invest in oil exploration and extraction in Brazil, not refining. Refineries are a riskier investment since they rely on internal factors such as uncertain market demand for fuel and prices, which are often regulated by the government. But Brazil needs them. Though the country is self-sufficient in terms of its oil use, it still imports diesel and gasoline.<\/p>\n<p>The bet on Comperj will buy CNPC a lot of credit with Petrobras, according to Almeida. The partnership could be good for China to keep exploring oil reserves in Brazil, where, he says, conditions are better than in countries in the Middle East, where politics can be even more volatile, and the US, where competition is too fierce.<\/p>\n<h2>Big environmental costs<\/h2>\n<p>While many celebrate the return of jobs to Comperj, environmentalists are worried. For years, they and the oil industry have clashed over Comperj since refineries facilitate pollution through the burning of fuel. Beyond this, Comperj\u2019s location aside Rio de Janeiro\u2019s Guanabara Bay makes it especially risky.<\/p>\n<p>For decades, the bay has suffered from contamination by another refinery, the Duque de Caxias Refinery, or Reduc.\u00a0In 2010, the head of a local environmental agency\u00a0<a href=\"https:\/\/economia.estadao.com.br\/noticias\/negocios,inea-identifica-reduc-como-maior-poluidora-do-ar-no-rj,48470e\">told the press<\/a>\u00a0he had identified Reduc as the biggest polluting agent in the state of Rio de Janeiro. Heavy shipping traffic and nearby towns\u2019 informal sewage systems also plague the bay\u2019s environment.<\/p>\n<p>Comperj happens to sit on a relatively clean spot and the management of environmental risks will be closely watched.<\/p>\n<p>Researchers nicknamed the nearby Environmental Protection Area of Guapimirim \u2018Noah\u2019s Arc\u2019 since it safeguards many species facing ecological oblivion.<\/p>\n<div class='cdo-shortcode--image'><\/p>\n<p><figure id=\"attachment_20500\" aria-describedby=\"caption-attachment-20500\" style=\"width: 640px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-20500 size-full\" src=\"https:\/\/dialogue.earth\/content\/uploads\/2018\/12\/Guapimirim.jpg\" alt=\"china brazil investment\" width=\"640\" height=\"427\" \/><figcaption id=\"caption-attachment-20500\" class=\"wp-caption-text\">The Environmental Protection Area of Guapimirim, in the Guanabara Bay. (Image: Filipo Tardim)<\/figcaption><\/figure><\/p>\n<p><\/div>\n<p>\u201cIf one day, we can reduce the sewage spillage and industrial residues in the bay, it\u2019s expected that it will recover,\u201d says Breno Herrera, a former head of the Guapirim protection area who wrote his doctoral thesis about Comperj. He says Guapimirim could provide a vital arena for the regeneration of species including the endangered Guiana dolphin, whose numbers have depleted as a result of pollution.<\/p>\n<p>Herrera says Petrobras failed to recover native vegetation in the region that would mitigate Comperj\u2019s impact. Petrobras denies this. He hopes CNPC will be more responsive to pressure from environmental campaigners.<\/p>\n<p>Herrera admits the region needs jobs. However, aside from construction work, he says there are opportunities for the town in replanting trees and cleaning rivers.<\/p>\n<blockquote><p>Ideally we would have high-tech companies, and everyone would be working in air-conditioned rooms, filing patents and winning Nobel prizes. But this is what we have.<\/p><\/blockquote>\n<p>Furthermore, in many countries around the world, job creation linked to renewable energy projects is growing faster than in traditional fossil fuels. In the US, the solar workforce increased by 25% in 2016, while employment in wind power increased by 32%, according to the US energy ministry\u2019s last\u00a0<a href=\"https:\/\/www.energy.gov\/sites\/prod\/files\/2017\/01\/f34\/2017%20US%20Energy%20and%20Jobs%20Report_0.pdf\">Energy and Employment Report<\/a>. It is expected to continue growing.<\/p>\n<p><a href=\"http:\/\/ieefa.org\/ieefa-report-china-continues-position-global-clean-energy-dominance-2017\/\">China is the main motor behind this growth<\/a>, building and financing renewable energy technology across the world \u2013 including in Brazil, where Chinese companies own hydropower plants and are increasing their stake in the\u00a0<a href=\"http:\/\/stage.dialogochino.net\/brazils-wind-chimes-with-china\/\">wind<\/a>\u00a0and\u00a0<a href=\"http:\/\/stage.dialogochino.net\/why-doesnt-brazil-have-a-solar-industry\/\">solar<\/a>\u00a0sectors.<\/p>\n<p>According to\u00a0<a href=\"https:\/\/www.irena.org\/-\/media\/Files\/IRENA\/Agency\/Publication\/2018\/May\/IRENA_RE_Jobs_Annual_Review_2018.pdf\">a 2018 report<\/a>\u00a0by the International Renewable Energy Agency, Brazil is one of the six countries that benefits the most from the transition to renewable energy, with 893,000 jobs created. Brazil is the leading employer in the biofuels industry.<\/p>\n<p>Right now, however, economist Almeida says Itabora\u00ed needs Comperj to lift it out of an urgent economic and social crisis.<\/p>\n<p>\u201cIdeally we would have high-tech companies, and everyone would be working in air-conditioned rooms, filing patents and winning Nobel prizes,\u201d he said. \u201cBut this is what we have.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>After three years of struggle, Josu\u00e9 Ribeiro is finally hopeful again. He used to have a good job at oil refinery Comperj\u2019s construction site in Itabora\u00ed, Rio de Janeiro. But in 2015, as Brazilian prosecutors untangled a massive corruption scandal involving Petrobras, the state-owned company behind the project, construction ground to a halt. Thousands were [&hellip;]<\/p>\n","protected":false},"author":50000003,"featured_media":50016650,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[757],"tags":[547,50040749,585],"hashtags":[],"country":[50000021,20000110],"class_list":["post-50015847","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-fossil-fuels","tag-livelihoods","tag-renewables","country-brazil","country-china"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v26.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Chinese investment brings hope to a fallen city | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Once a symbol of Brazil\u2019s rise, Itabora\u00ed expects a controversial oil refinery to create many jobs\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dialogue.earth\/en\/energy\/15847-chinese-investment-brings-hope-to-a-fallen-city\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chinese investment brings hope to a fallen city\" \/>\n<meta property=\"og:description\" content=\"After three years of struggle, Josu\u00e9 Ribeiro is finally hopeful again. He used to have a good job at oil refinery Comperj\u2019s construction site in Itabora\u00ed,\" \/>\n<meta property=\"og:url\" content=\"https:\/\/dialogue.earth\/en\/energy\/15847-chinese-investment-brings-hope-to-a-fallen-city\/\" \/>\n<meta property=\"og:site_name\" content=\"Dialogue Earth\" \/>\n<meta property=\"article:published_time\" content=\"2018-12-20T11:36:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-26T11:42:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/dialogue.earth\/content\/uploads\/2018\/12\/imageedit_4_6811041560.jpg\" \/>\n<meta name=\"author\" content=\"Sophie Bauer\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" 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