Oil revenues will double with production in Transfer of Rights areas, says ANP

 

Sept 30, 2019

Union, state and municipal oil revenues will double in five years. According to calculations by the National Agency of Oil, Gas and Biofuels (ANP) obtained by GLOBO, the estimated production of 1.2 million barrels per day of the four areas of the Santos Basin pre-salt, which will be offered in the Transfer of Rights auction, will be able to supply the public coffers with $ 52.5 billion per year as of 2024.

The figure is very close to everything that was collected in royalties and special participation (PEs) by the entire oil industry in the country in 2018: $ 55.2 billion.

Considering the income tax to be paid by the oil companies, the collection of the four fields rises to about $ 70 billion per year.

– This estimated volume of tax revenue is practically equivalent to a pension reform – compares ANP Director-General Décio Oddone with the $ 876 billion that the government intends to save in ten years with the new rules for retirement. – These are estimates, but the numbers give an idea of ​​the level of magnitude that the future collection will reach.

Oddone, from ANP, explains that the collection estimates that will be generated by the four areas of the auction consider the installation of ten platforms, with capacity of 150 thousand barrels per day each, in the region, besides an international quotation of the barrel of oil around $ 70 and the dollar exchange rate at R$4.

These platforms are expected to start operating gradually from 2024, peaking in the next decade. The activity should generate an investment demand by industry of around R$ 1.7 trillion by 2030.

Rio, whose coastline borders the fields of the Transfer of Rights, will be the most benefited. In the pre-salt sharing model, which charges oil companies the highest share of government bonus, nearly 60% of the royalty share is split between producing states and cities. This means that the production of the four fields will be a new opportunity for the rebuilding of the state Rio and cities’ finances to make investments capable of making the future viable without oil.

The condition of a producing state also guarantees Rio greater share than the other states of the federation in the $106.5 billion that must be collected in the auction from signature bonus, for the right of exploitation. The Union promised to share 30% with all states and municipalities, and the Senate secured $ 2.5 billion for Rio, to be confirmed in the House.

 

Source: Reuters