Brazil govt actions indicate convergence with oil industry
Minister of Mines and Energy, Fernando Coelho Filho 
The chair of the Brazilian Petroleum Institute (IBP), Jorge Camargo, said the oil industry was encouraged by recent hints of the istration of interim President Michel Temer that indicate convergence with the business agenda of the oil industry. According to Camargo, there was a feeling in the industry that the global oil scenario was changing and required the business environment and regulations to adjust to accommodate these changes.
“With this [interim] istration comes a sharper sense of urgency and an awareness of the importance of these big changes. We have felt this from conversations with the [new] minister [of Mines and Energy],” he said.
For Camargo, who was at the ceremony that welcomed the new Petrobras CEO Pedro Parente in Rio, the fact that the Brazilian government shows for a bill pending before the Chamber of Deputies that will change the law on Production Sharing (so that Petrobras will no longer be the operator for blocks under a Production Sharing arrangement) and rid the state-run oil company from the obligation to invest in a 30% stake in oil exploration and production projects in the so-called pre-salt layer.
“The government's favorable stance [on these changes] will help ensure we can auction pre-salt areas. The industry is waiting for an auction of unitizable areas [reserves connected with already auctioned fields that may be ed with them into a single production unit], which is an opportunity that is ready to be tapped,” Camargo said.
According to him, the oil industry hopes the bill is ed by Congress so the government can hold the auction this year. He noted, however, that if the draft ed by the Senate gets amended by the Chamber of Deputies, it will have to be reviewed by senators again.
Camargo pointed out that the current agenda for the industry favors private investment and this is seen positively by Petrobras in the adverse scenario the company is facing. “The oil and gas industry is a leverage for the Brazilian economy, because it is a sector that does not depend on economic recovery. The construction industry relies on an economic recovery to pick up again, but [the oil industry does not], it has a path of its own and can draw investment and [create] jobs,” he said.
The Minister of Mines and Energy, Fernando Coelho Filho, who also attended the inauguration of the new Petrobras CEO, said the future of Brazil's energy sector depends on a full recovery of Petrobras's ability to make investments and fulfil its inherent leadership potential. “If we want to grow and develop we need more energy, whether it's fuels, biofuels, gas, or electricity,” he said.
According to Jorge Camargo, the expected oil industry investment in the country this year, including both Petrobras and the private sector, ranges between $20 billion and $25 billion, which he says is a poor figure. “Brazil can double this. If we look at the global exploration and production investments, which have seen significant drops and now range around $700 billion, Brazil's $20-$25 billion is too little,” he said.
But resuming investment, he argued, will largely depend on regulatory changes and investors. “One thing at a time. We need to create an environment that s investment. We at IBP are convinced that once this environment becomes favorable, investments in Brazil can increase greatly.”
Translated by Mayra Borges
Fonte: Brazil govt actions indicate convergence with oil industry
