The oil, natural gas and biofuels areas already have investments guaranteed around R $ 800 billion by the end of the next decade with projects announced or contracted by the government since May 2016. In a positive tone, on the eve of a change in the team that will be triggered by Minister Fernando Coelho Filho’s already announced exit, it is estimated that this volume could reach a figure of R$1.28 trillion with new projects that will have a referral in this year.
Secretary of the Ministry of Mines and Energy, Marcio Felix Bezerra, points to the oil “mega auction” and the expectation of announcement of a new private refinery as highlights in the remaining period of government. He reiterates the expectation of doing, in the second half of the year, the auction of six blocks in the pre-salt assigned to Petrobras in the process of capitalization of the company made in 2010. According to the oil and gas secretary, the surplus of the onerous assignment is practically guaranteed. “It is an area with very low risk, large volumes, very high productivity.”
According to their estimates, if the mega auction allows the exploration of another five billion barrels of oil, investment in new production systems could reach R$ 150 billion in less than ten years.
Each system – that includes the construction of subsea wells, flow units and offshore platforms – to 500 million barrels costs approximately R$ 15 billion. Felix believes that, with the surplus auction, the share of the oil and gas industry in GDP could exceed 20%.
Another relevant investment is linked to the ministry’s strong expectation of a new private refinery announcement later this year. Maranhão and Ceará have an “Olympic dispute” for the project, which would have a budget of at least R$15 billion and could process from 200,000 to 250,000 barrels per day of oil, according to their projections. Felix said there are talks underway – led by state governments and with ministry participation – with Chinese, Koreans, Indians and Iranians.
Today, at a meeting of the National Energy Policy Council (CNPE), a set of measures to stimulate the attraction of investment in refining must be approved. They are not “revolutionary” measures, according to Felix, who discards tax incentives. An example of what is coming out shows how some simple questions are: allowing a refinery to operate in the same area of an export processing zone (EPZ). It was a request made by the government of Ceará.
According to the secretary, a bet of foreign investors in refining in Brazil is not trivial. “It takes a lot of courage to enter a market where the dominant actor [Petrobras] owns 99% of the market,” he says.
On the other hand, according to him, the growth of production in the pre-salt causes Brazil to export about 1 million barrels a day in crude oil and continue importing derivatives. “Countries with a balance between supply and demand are rare,” says Felix. Only the logistical cost of exporting crude oil and bringing gasoline is U$7 a barrel, he says.
In addition, other priorities of the ministry in 2018 are the definition of the RenovaBio goals and the new regulatory framework for natural gas. The government sees the possibility of tripling gas production over the next ten years, but believes that new legislation is key. A text has already been sent by the Palácio do Planalto to the House of Representatives as a substitute for a bill that was being negotiated to reform the sector. The secretary expects to make a mapping of convergences and disagreements with the original text by the end of this month. Thus, it would be possible to seek the vote of the bill in the House still in April.
“It is a fundamental project to attract investors,” concludes the secretary. “We want to increase the chance of approval in this small parliamentary window that lies ahead,” he adds, recalling the election period.
Source: Valor | Daniel Rittner
Brazil Energy Insight 
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