Brazil’s total collection from royalties and special stocks in oil production set a new record in 2021, a report published today (Jan. 27) by the country’s national oil agency ANP shows. A total of BRL 37.6 billion and BRL 36.8 billion have been distributed to states, municipalities, and the federal government in royalties and special stocks respectively—up 65 percent from 2020.

The surge is believed to come chiefly as a result of the hike in the price of the oil barrel in the international market and the depreciation of Brazil’s real relative to the dollar. ANP also pointed out that an increase was seen in the output from fields under a shared production regime, in the pre-salt polygon.

Royalties are financial compensation paid by oil and natural gas producers to Brazil’s government, since revenues stem from non-renewable resources in the country.

The amount is charged on the value of the production in each field and is paid by the companies on a monthly basis. To reach the final amount owed by oil producers for each field, ANP takes into account the rate laid forth in the agreement for oil and natural gas production, as well as the benchmark price of these resources in the month.

Special stocks, in turn, are handed out to the government every three months as extraordinary financial compensation from the companies exploring fields with considerable production and profitability.

In such cases, rates are progressive and vary according to location, years of production, and the output yielded by the field in a particular three-month period. The amount is charged over net revenues in each field, considering deductions outlined under the law—royalties, investments in exploration, operational costs, depreciation, and taxes).