The uncertainties brought by the political crisis have left the oil and gas and electric power industries apprehensive about the resumption of investments in the country and the agendas that were in progress. Among the oil companies, the perception is that the auctioning schedule announced by the current Ministry of Mines and Energy (MME) management has reignited interest for Brazil, but that the institutional crisis may hinder the extension of Repetro (special customs regime in the sector Of oil and gas), according to sources consulted by Valor.
The extension of Repetro worries because it depends on the articulation between different fronts of the government, like the MME, Min. of Finance (including the Internal Tax Revenue) and the signature of the president Michel Temer. Executives consider it unlikely that measures already announced by the government, such as the auctioning calendar and the reduction of local content indices, will be repealed in a possible departure from Temer. In assessing the sources, however, this year’s auctions have “little chance of success” without the extension of the Repetro.
“Brazil has returned to the spotlight of the big global companies. I believe that the regulatory changes have come to stay and that the pre-salt is attractive, but the non-renewal of Repetro, before the auctions, that yes, would scare off investments “, emphasizes the president of an oil company with activity in the Brazilian pre-salt.
The president of a multinational oil and gas supply chain reiterated that the extension of the special regime is a “sine qua non” condition for oil companies to make long-term investment commitments.
A source from a multinational oil company also mentioned that the company’s executives in Brazil have maintained constant contact with the home office, but “nothing very different” from the attention that the country has aroused since the first articulations around the impeachment of the former president Dilma Roussef, in 2015.
The perception among executives is that, regardless of the government, Brazil needs this year’s auctions to reduce its fiscal deficit. The expectation of the bonus only with the two auctions of pre-salt sharing is R $ 7.75 billion.
The director general of the National Petroleum Agency (ANP), Décio Oddone, said that the upcoming auctions are already authorized by the National Energy Policy Council (CNPE), and that the ANP has legal mechanisms to conduct the proceedings.
“Brazil’s particular situation, the Brazilian recession, for example, and the pace of economic growth have very little impact on company plans. They are not going to exploit oil to serve the Brazilian market, the dynamics of this market is different, and that all distances the oil investor a bit from this crisis, “said Oddone, who fulfilled an agenda with investors last week in London.