In his book, Brazillionaires (Random House, 2016), writer and former Bloomberg reporter Alex Cuadros tells the story of modern day Brazil through the lens of its billionaire businessmen and entrepreneurs. In the following edited excerpt, leading man Eike Batista starts as one of the richest people in the world as his country enjoys an economic boom in 2012, only to lose it all three years later.
The same week I moved to São Paulo, in April 2010, Eike Batista recorded a Web video for a local brokerage. He had just been named the richest man in Brazil, and he wanted to let mom-and-pop investors in on the potential of his oil company, OGX Petróleo & Gas. "I consider these exploration blocks maybe the best in the world," he said. "I'm going to repeat it: in the world. There's a trillion dollars in value there." Trillion with a T. He spoke of the low costs involved in extracting all this oil and calculated that the total profits would add up to a hundred billion dollars. "That's more than three times the value of the company today," he said. "One of the reasons I'm here is that I don't want Brazilians to miss out on the chance to make money with this. . . . Don't miss the chance to buy this stock."
Eike wore a black suit and a black T-shirt that brought out his pale white skin. Atop his gray sideburns sat a thatch of dark hair. Sitting across from two analysts from the brokerage, he gesticulated with both hands to emphasize his points. Screens of different sizes on the wall behind them showed freeze-frame images of an oil rig, giant construction cranes, concrete pillars rising from the sea--all ostensibly part of his empire. The way they all talked, you might forget that OGX had yet to pump a single drop of oil. It was a startup. It was worth thirty billion dollars on the stock market be- cause investors expected lots of oil one day to gush forth from its wells. In just a few years, Eike said, it would be producing a million barrels a day, more than the entire nation of Oman.
As a serial entrepreneur, Eike was unrepentant, displaying the zeal of the newly in love each time. In the late nineties, when he dipped into industrial water supply, he proclaimed, "Gold is a jurassic industry. Water is the industry of the twenty-first century." He liked to say he read "the newspaper of tomorrow." Even now, trying to get five public companies up and running--it wasn't enough. Paulo Mendonça, the OGX exec, told a story about how Eike stayed home sick from work once. He spent the day in bed. The next day when he showed up at the office, he said, "You're all fucked. I didn't sleep well, and I wrote up twenty-seven new business ideas that we need to get cracking on right away."
Eike had endless side ventures. He opened an upscale Hong Kong-style restaurant in Rio, Mr. Lam, and brought over a chef from his favorite restaurant in New York. He sponsored a new volleyball team, RJX. He started a private clinic, MD.X. He opened a catering business, NRX-Newrest. He had hotels and an office building. For his new girlfriend, a perpetually tan lawyer named Flávia Sampaio, he opened a beauty clinic, Beaux, where you could sip champagne while getting your nails done. Eike's entertainment business, IMX, brought Cirque du Soleil to Brazil and organized Ultimate Fighting Championship matches. He was thinking of getting into coffee, that nineteenth-century boom crop. He looked at getting into television, but the Marinho brothers talked him out of it. Still, he was looking ahead--planning to build electric cars! Asked if he planned to invest in tech, he said, "I'll be dedicating resources to that too. I've got so many--my plate is pretty full, no?"
Despite his nationalistic ambitions, Eike spoke about entrepreneurship in American, not Brazilian, terms. He lamented that in Brazil failure was a bad word. "I'm glad to have had failures," he said. "In the United States, failure is the basis for doing something better afterward. There you can go to the market and raise capital again and everything's okay. I think failure should be seen more as a learning experience." If you didn't fail, after all, you weren't taking risks, and in Brazil success without risks meant doing business with the government on sweetheart terms. "Everyone got used to receiving a contract," Eike said. He loved to criticize empreiteiros, construction tycoons like those who ran Camargo Corrêa and Odebrecht. "When I ask my good friends the empreiteiros if they have the appetite to invest in drilling for oil, you know what they say? 'You mean I'm going to spend eighty million dollars and I might not find anything? I don't have the stomach for that.' This is very Brazilian." What Eike wanted to convey was that, in a nation of rent seekers, who sought to control the economic pie rather than make it larger, he put his own capital on the line--all to make Brazil a better place.
So if Eike was unabashed about his failures, why did he frame TVX [a failed gold mining venture] as a success? Perhaps he truly believed that it was a success, somehow overlooking all that happened in the end. Or perhaps he believed that its failure had nothing to do with his abilities as an entrepreneur. On the rare occasions he spoke about it, he blamed the Greek government for failing to fulfill its contract with him. He didn't blame himself for betting the house on an uncertain prospect. With Eike I would learn that the line between deception and self-deception often blurred.
Whatever his reverence for the American business tradition, Eike didn't feel the need to flatter its greatest exemplars. When a reporter asked what he thought of Bill Gates and Warren Buffett, he scoffed and said the difference between him and them was that Gates built just one company and Buffett acquired other people's companies on the cheap. "I create things from zero," Eike said. He knew that some people thought he was a megalomaniac. "That doesn't bother me," he wrote in his book. "In the right proportion, a bit of megalomania or daring is recommended. No successful entrepreneur doesn't have at least a little. When the business proves viable, its creator is no longer a megalomaniac. He becomes a visionary."
And then in January 2012 his vision looked vindicated. After all the delays, OGX's first well started pumping at last. Webcams livestreamed the moment the underwater valves opened. It was a triumphant moment, not just for Eike but for his country--the first time a private Brazilian company had ever produced oil. A reporter asked Eike how he planned to celebrate, and he said, "I have a cellar with magnums of champagne from vintages going from 1956 to 1980. We're going to open one of these bottles." The accompanying photo showed Eike smiling in a dark suit and black T-shirt, splayed on top of his desk in a pose worthy of Luma, his Playmate ex. Through the windows behind him, Sugarloaf Mountain rose proudly from the sea.