Grupo de Economia da Energia

Posts Tagged ‘pre-salt’

Pre-salt: an obstacle to renewable energy?

In oil, renewable energy on 28/11/2011 at 00:09

By Edmar de Almeida 

Recent accidents involving oil spillage in the Gulf of Mexico and now in the Campos Basin raise an issue on Pre-salt exploitation in Brazil: Would Brazil going through an irrelevant adventure with the imminence of substituting renewable energy sources by oil?

This question is linked to the idea that oil is a former energy and there is no worth to mobilize society’s resources in a business doomed to shrink and disappear quickly. This idea has no support nowadays.

Prediction studies of global energy matrix show oil and natural gas still prevailing in long-term horizon. According to the International Energy Agency, these energy sources, together with other fossil fuels, will account for 75% of global energy matrix in 2035, the most optimistic scenario for renewable energies.

This type of prediction is confirmed by other government agencies and major energy companies worldwide. We can say that oil and gas will keep a prominent role in the long transition to a decarbonized economy. Thus, Pre-salt is a significant comparative advantage for Brazil. Our country could take a leading role in the energy transition, not only because of its large endowment of oil and gas, but also because of its significant potential for renewable resources. Continue lendo »

Prices, costs and new regulatory framework for oil

In oil on 25/04/2011 at 00:30

By Thales Viegas

The production sharing agreement, in Brazil, changes significantly the role of costs and prices in oil activity regulation. First, costs have become the decisive factor for determining the surplus oil to be shared. Second, the price of oil may not only be a reference to the monetization of oil for each agent involved, that is, the price which pays the oil purchased by agent. It can also influence the magnitude of the sharing, if the price is a variable in the calculation that defines the percentage of surplus for the government. In some countries, to share profit oil with the government depends upon the price of oil. That is, the higher the price of oil, the greater the government’s portion for the profit oil.

By deduction, the production sharing agreement may fix the involvement of government in production, but also can allow it to alternate according to contract items previously agreed. Given the centrality of price and cost variables, the following analyses attempt to explain the interdependent dynamics of these two items. Continue lendo »

Brazil: The Pre-salt and State control

In oil on 22/11/2010 at 00:34

By Ronaldo Bicalho

The ongoing changes in the institutional framework related to oil exploration in the Pre-salt includes an overview of the strategic role to be played by the Brazilian petroleum sector different from that one defined previously, both with respect to the newly global Brazilian insertion and supporting conditions of such insertion.

The core of this change is focused exactly on expansion of the State control over the exploitation of the Pre-salt resources, in order to achieve maximum benefits from such exploitation, under a long-term strategic perspective that transcends the boundaries of the oil industry.

Thus, changes related to the institutional framework of the Brazilian oil sector is not a merely discussion about the advantages and disadvantages of exploitation systems – concession agreement versus production sharing agreement -; advantages and disadvantages of Petrobras’ interest in all consortia; advantages and disadvantages of Transfer of Rights and Petrobras’ capitalization; advantages and disadvantages of establishing a new state-owned company; and so on. Continue lendo »