Oil industry believes current Law regulating that sector is positive
During the seminary “Brazil in face of the pre-salt”, held on Wednesday (3), at the Chamber, the representative of the Committee on the exploitation and production, of the Brazilian Petroleum, Natural Gas and Biofuels Institute (IBP), Ivan Simões Filho, made a positive assessment on the current Law of Petroleum (Law 9.478/97). IBP is 57 years old, and represents of companies of all sizes linked to that industry.
According to him, the rule needs adjustments, but it made a good move by allowing the entry of partners and investments, which increased the efficiency of that system. “There is already a regulation on the right to export, and it is possible, if we affect small changes to it, to prioritize the Brazilian refining park, if it is the case”, he said.
Priorities
Simões Filho defended four priorities for the change of the current law. First, the government participations can be paid in products, instead of cash, which would allow the government to give a different destination to oil.
Second, it is also possible to prioritize domestic refineries, which would add value to the product, when exported. The incentive to domestic industry, which exists in most of the infrastructure contracts, can be broadened. And, finally, the increase of government’s participation in contracts, with a smaller exploitation risk, can be made according to the current model.
Critics to the sharing
The representative of the oil industry criticized the production-sharing model, since the trend is that production costs are eliminated from that sharing, which does not encourage effective production, and transfers risks to the government.
According to Simões Filho, though, there is a balance between the two most used models – sharing and concession – among the owners of the 15 largest oil reserves in the world.
According to his understanding, multinational companies work according to the two models, and the promise that Brazil will not terminate existing contracts is the guarantee needed by the market to keep investing in Brazilian oil.
Report - Marcello Larcher
Editing - Newton Araújo
Translation - Positive Idiomas Ltda