The former director general of the National Petroleum, Natural Gas and Biofuels Agency (ANP) and FGV Energia consultant, Magda Chambriard, said she did not see any risk of legal or regulatory uncertainty in the oil and natural gas sector, regardless of who wins the election for the Presidency of the Republic in October.
“This is the question I have been asked the most since Rio Oil & Gas started. But I have no concern for that [regulatory and legal uncertainty],” Magda said during a panel at the main congress of the Brazilian oil industry.
The former director of the ANP also said that, regardless of the new government, the auctioning of exploratory areas for oil and natural gas should continue in the coming years. “I do not believe that there is in Brazil any person in any position who is interested in preventing the development of something as grandiose as the pre-salt,” he said.
For Magda, what may change, depending on the new government, is the pace of offers of new areas. “Keeping the [auctions] schedule is one thing, at what pace [to do the auctions] is another. I would bet on a lower pace, but not on cancellation of rounds [depending on the new government].”
Regarding the auction schedule, the former director of the ANP stressed that the instrument is important not only for the strategy of the oil companies, but also for the investment plans of the suppliers of the oil and gas chain. “The calendar gives predictability and encourages oil and gas suppliers to develop.”
Regarding the current policy of local content for the sector, FGV Energia’s consultant said that, in her opinion, more important than defining a percentage limit is to structure a program in a country’s industrial development policy.
Magda pointed out that preliminary estimates indicate that, with only the areas already auctioned to date, Brazil has something of the order of 25 billion barrels of oil equivalent to develop, “which would give us ten years of development peacefully.”
According to her, given the potential and productivity of the pre-salt, the 5th Pre-Salt Round, scheduled for Friday, should be successful. “As long as there is pre-salt, there will be an auction and people paying a lot [for the areas],” he added.
The biggest problem in the Brazilian oil industry today, for Magda, is the environmental issue, due to the difficulty of licensing activities in exploratory areas already bid by the local authority.