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The regulation of oil exploration in Brazil has always been the subject of political conflict and confrontation concerning differing views of the role of the state in the country’s economy. Nowhere is this more true than in the case of the mixed economy company Petrobras. After spending decades to discover oil, further decades passed before acceptable levels of production were achieved in the 1980s. Initial efforts were focused on becoming self-reliant and it was not envisaged that the country would become a large exporter. The discovery of large oil reserves in 2007, however, reopened the debate and fueled the political conflict that brought down president Dilma Rousseff ten years later. This article analyzes the dynamics of the debate and the policies that have been implemented since the foundation of Petrobras. The focus at the start is on the period prior to the creation of Petrobras. The next period studied covers three phases: starting with a time when Petrobras was a state monopoly, followed by the more liberal era that lasted until the election as president of the Republic of Luiz Inácio Lula da Silva (2003-2011) and concluding with the years of left of centre governments. The final period deals with the return of liberalism following the impeachment of Dilma Rousseff in 2016.