Petrobras President Roberto Castello Branco defended today (3) changes in the rules for oil exploration and production in Brazil, which he classifies as unattractive to business. For him, the sharing regime must be extinguished. Castello Branco participated in an online chat at Rio Oil & Gas, the largest event in the oil and gas sector in Latin America.

“I think that the regulatory framework for oil exploration in Brazil has to be modified”, defended Castello Branco. “The sharing contract is something that has no economic sense, it does not bring any incentive to efficiency, it taxes oil producers too much. A complicated business. The business world doesn't like complicated things, they want things that are clear, transparent, simple ”, he said.

The sharing regime was instituted in 2010, after the discovery of the pre-salt polygon in 2007. The discoveries in the pre-salt are among the most important in the world in the last decade. This area is composed of large accumulations of light oil, of excellent quality and with high commercial value. Until then, all areas were granted under the concession regime. Since then, the country has had a mixed regulatory regime.

The regime was established, according to the National Agency of Petroleum, Natural Gas and Biofuels (ANP), to preserve the national interest. With this model, Petrobras participates together with other companies in the exploitation of resources, in an agreed manner in tenders. The companies winning the tenders are those that offer the Brazilian State the largest share of oil and natural gas, that is, the largest share of the oil surplus.

“The sharing scheme is not used in developed countries, it is used exactly in countries where the World Bank's Doing Business report points out how difficult it is to do business. This does no good for Brazil, ”said the president of Petrobras.

The availability of natural resources in Brazil, according to him, is a necessary condition for the country to position itself well in the market, “but not a sufficient condition. We saw the evidence of this in the surplus auction of the transfer of rights last year, ”he said.

The auction took place in November last year and was the largest ever held in the oil industry. The Bidding Round for the Surplus of Transfer of Rights (surplus of the volume of oil and gas that the Federal Government gave to Petrobras) had, however, a collection of R $ 69.960 billion in signature bonuses, while the collection forecast was up to R $ 106.5 billion. Two of the four blocks did not even receive offers from the 14 companies qualified to participate.

Castello Branco argues that there is only the concession regime. According to the ANP, under this regime, the risk of investing and finding or not finding oil or natural gas belongs to the concessionaire, which owns all the oil and gas that may be discovered and produced in the concession area. Under this model of contract, the concessionaire pays government stakes, such as signature bonuses, payment for the occupation or retention of area, royalties and, in the case of large production fields, special participation.

Environment 

Castello Branco stressed the importance of reducing greenhouse gas emissions and stressed that the company invests in research and innovation, which can also bring benefits to this area.

“I think Petrobras is using and will use much more research and acquired knowledge and innovation not only to advance its business. We are now concerned with oil production after 2030, but also to reconcile that with reducing carbon, having cleaner production and these innovations are very important, ”he said.

Castello Branco admitted that emissions are still high and that it is necessary to “race against time in doing as much as possible to solve this problem”.

“There is no need for any social pressure to take care of the environment. You have to take care, it's a natural thing. As natural as taking care of your health, ”he said.

According to Petrobras' 2019 Sustainability Report, last year there was a 3% reduction in emissions compared to 2018. The company signed a commitment to zero growth in absolute operational emissions until 2025.