"Brazil will certainly do much better after the pandemic crisis that is plaguing the country and the world." The optimistic statement comes from the Minister of Mines and Energy (MME), Bento Albuquerque (photo), when participating today, 2, in a live held by Banco Citi. On the occasion, in addition to actions to deal with the impacts generated by the Covid 19 crisis, topics related to natural gas, actions for Onshore exploration, the Novo Mercado de Gás, Abastece Brasil, besides Renovabio, PPSA, among others, were discussed. matters. The meeting was mediated by the director of Research for the energy sector, Pedro Medeiros, and by Miguel Queen, Co-head of Corporate Banking at Citi Brasil.

Bento Albuquerque began his speech by recalling the pandemic that hit the country in a surprising way and that took the government to emergency actions to face the crisis. He spoke of the importance of the sectoral committees created in March, by MME, which had - and still have - the purpose of identifying the demands and defining the priorities. The result, according to the minister, has been very positive with the sum of more than 100 meetings held to date, with more than 116 agents involved, in a daytime and uninterrupted work.

Among the various impacts generated by Covid 19 in Brazil, Bento Albuquerque highlighted the price of the branch, in the month of April, which reached 19 dollars, a value that he considered “unprecedentedly similar, comparable to the great depression of the USA”. "Evidently this had a major impact on the oil, gas and biofuels sector," said the minister, noting that, except for LPG, there was not only a drop in demand for all fuels, but also a drop in gasoline consumption. 35%, 50% ethanol and aviation kerosene, 90%. "But we have already seen some recovery in the sector and, important to say, a consistent recovery," added Albuquerque. According to him, diesel was the least affected fuel, whose consumption today is already higher than the same period last year. "The impacts were observed, monitored, demanded from us a very large governance to maintain supply and production, and mainly, the balance of the matrix", said the minister.

“In this sense - he added - we develop actions and we still have actions to be undertaken. As a support measure, one of the biggest concerns is with small and medium producers. We recently approved a decree from the president, which approves a CNPE resolution authorizing the National Petroleum Agency (ANP) to reduce royalties to 5% in small and medium-sized companies. This means around 24 companies and 80 fields potentially benefited ”, he said. “We also had to suspend the auctions, from the 7th and 17th rounds, we kept the auction of the Surplus of the Transfer of Rights and also that of the Permanent Offer of the ANP, considering that the monitoring we do shows us that there was no reason to change these auctions ”.

Bento Albuquerque praised the actions aimed at post-crisis reconstruction and pointed out a promising scenario, with many opportunities for the future. “It was all built in 2019 with several resolutions given by the National Energy Policy Council (CNPE). We allowed the 6th round, the 16th round and, mainly, the Transfer of Rights Surplus Auction, which allowed not only a record collection of signature bonuses, and, on the other hand, if we had missed this occasion, we would have had a loss opportunity cost of more than R $ 200 million ”, noted the minister. “In addition - he stressed -, our resolutions have allowed us to launch programs such as Abastece Brasil, Renovabio and Novo Mercado de Gás. We therefore have excellent opportunities for resumption and for investments to remain, and we will, yes, work to to have a more attractive business environment for investments, whether national or foreign ”.

Exploration and production 

“Regardless of the regime practiced, whether concession or sharing, the Transfer of Rights, Brazil has always provided legal and regulatory security, respect for contracts and visibility for investors. No one can deny that, ”said the minister. And it is, according to him, within this context, that discussions about the ideal regime to be established have been taking place. “We are working in this direction, and a proposal is being processed in the Federal Senate that revokes Petrobras' preemptive right, within the pre-salt polygon, and allows CNPE to choose the best contracting regime, whether concession or production sharing within the polygon. the pre-salt layer ”, he stressed.

Bento Albuquerque also highlighted the BidSim program, which will allow giving the CNPE objective and adequate criteria for decision making. “In addition, the program will provide support for the economic models of the auctions. We understand that with these improvements and with the approval of this bill, we will have the best conditions to keep our exploration areas more attractive and profitable ”, said the minister, who clarified about the 17 contracts already signed and in progress of the sharing regime and that they will not undergo any modification, as well as the Sépia and Atapu auctions - two areas that remain from the Transfer of Rights - which, likewise, remain unchanged.

“We are working, first, to reduce or eliminate uncertainties, even guided by the TCU itself, so that we define the compensation that must be paid to Petrobras. And we intend, within this Assignment of Rights model, not only to eliminate uncertainties and define parameters, but we intend to seek, from October this year, all interested companies, so that we can exchange information, questions and necessary clarifications so that the auction will be held in August 2021 ”, highlighted the minister.

Supply Brazil 

“When the Abastece Brasil program was launched, a year ago, 100% of the production and import of LPG was done by the dominant agent, Petrobras, and still is. But it is not desirable that we have an agent that dominates the market ”, recalled Bento Albuquerque, who also mentioned other situations such as 99% of the QAV market also concentrated in only three companies, the refining of the country done entirely by Petrobras, in addition to 67% imports of gasoline and diesel, also by the same state-owned company. "We had to change this market so that we could make it a more attractive, more competitive market that could offer better services to the consumer", argued the minister.

In this context, Bento Albuquerque highlighted the ongoing divestment of Petrobras, the elimination of double taxation of LPG from natural gas processing units, and the end of price differentiation. “We are working on the transition of this divestment model together with the ANP and also with the cooperation of Petrobras, seeking to preserve security of supply, predictability and regulatory stability. Finally, we are working on combating fuel evasion and adulteration, which is one of the problems we have in the sector. And we approved a policy of free competition in refining, in April last year, so that we could sell products at market prices, have more agents, and deal with infrastructure in all downstream segments, ”he said.

Natural gas 

“We launched the Novo Mercado de Gás program within CNPE, a year ago. At that time, the scenario was a single agent, concentrated on Petrobras. And we know that the cost of this energy input is fundamental for the industry. And our price here is two to four times more expensive than in Argentina, the USA and most European countries ”, explained Bento Albuquerque. Therefore, we have focused actions on some pillars such as increased competition, regulatory updating, integration, which is fundamental and essential with the electric and industrial sectors, and, finally, the end of tax barriers, which is also a key point for the program, ”explained the minister.

Among the achievements, Bento Albuquerque mentioned the opening by Petrobras to the entry of new agents, such as Gasbol. The minister spoke about an Additive, already signed, that allows new agents to contract, for example, 10 million cubic meters / day of natural gas. "This, in my view, is extremely important, especially in the area that serves this pipeline," said the minister, who highlighted the emergence of new private LNG terminals in Sergipe, Santa Cataria, Barcarena and other cities. According to him, thirteen states have also expressed interest in the new market and five have already started regulatory improvements. "I think we will have more competition from our gas thermal plants, as a result of this program, in the next energy auctions," he said.

“The question of natural gas - the minister emphasized - will be very important not only for the reindustrialization of Brazil, but also for the generation of energy from natural gas, not only for its economy but also for what contributes to the reduction of carbon dioxide emissions. We are very optimistic that the new regulatory market in the gas sector is being approved by the National Congress in the second half of the year, which is PL 6407, to be voted on in the Chamber of Deputies. We are working so that in the second half of the year we have this new regulatory framework that is aligned with the Novo Mercado de Gás program and that will significantly boost this important sector of our energy economy ”.

Privatization of PPSA 

On the issue involving the privatization of PPSA, Bento Albuquerque recalled that the company's activities today are aimed at representing the Union in the management of contracts and managing the marketing of Union oil. PPSA, according to the minister, has 17 contracts from the sharing regime and has already raised 1.2 billion reais for the Federal Government since 2013, with the expectation of raising 1.2 billion reais by 2030. “We have been working together with the Ministry of Economy, we are doing this, in the case of PPSA, to check possible commercialization models for the Union's profit oil in existing contracts. But most importantly, this is a message that I like to repeat: respect for existing contracts, legal certainty and predictability for investors ”.

“PPSA - he emphasized - cannot be sold, because it was created by law and would have to go through a process. Furthermore, the sale of Union oil cannot be done by a third party. So, all of this is being considered so that there is a better return for Brazilian society, especially in the face of this crisis that has plagued the world, and particularly our economy ”.

Renovabio 

Renovabio was also a topic addressed at the live, especially as Brazil is a signatory to global climate agreements. "This is the theme that I speak of, not as a minister, but as a Brazilian, with unmistakable pride," said the minister. “I consider Brazil to be an example to the world in terms of biofuels,” added Bento Albuquerque, who made a quick review of programs created over the past 50 years. “Now more recently, we have seen the emergence of biodiesel, along with the expansion of agribusiness. Brazil already has biodiesel with 12% added to diesel today, and within the established schedule we will reach 15% by 2023. We consider this a program that is not only strategic, but also because it gives sustainability to our fuel matrix and promotes the the largest transport material decarbonization program in the world. It promotes environmental energy efficiency, produces more energy and less emission of carbon dioxide ”, declared the minister.

“Recently - he added - we started selling CBIO, which is the Decarbonization Credit, an environmental asset traded on the Stock Exchange. Renovabio will increase the energy share of biofuels in our matrix from 20 to 30% over the next ten years, increase the demand for biodiesel from 6 to 12 billion liters / year, and will reduce our emissions by more than 600 million tons of CO2. So, it should be a source of pride for all Brazilians, as well as being a highly attractive market for investments ”.

Onshore exploration and production 

In this theme, Bento Albuquerque recalled the launch of Reate in 2019, in a very planned way. For him, onshore fields are very important for the generation of jobs, income and also for the production of oil and gas. In this context, according to the minister, Petrobras has made a significant contribution to its divestment. "These are very positive perspectives that beckon us," he said, recalling the first time that Petrobras does not participate in a cycle, such as that of the ANP Offer. “Several small and medium-sized companies participated because they saw an opportunity in the business. Why are we maintaining, now, the second cycle of Permanent Offers? Because there are interested investors. Companies from more than 12 countries have already expressed interest in participating ”, said the minister. “I think we have an attractive business environment and this shows that, in the last 2 years, 90% of the world's signature bonuses are concentrated in Brazil. The numbers speak for themselves and evidently that public policies have to live up to expectations and vice versa, otherwise, something is wrong ”, he observed, stating that the prospects for the resumption of these onshore investments in various regions of the country are very positive. .

Bento Albuquerque ended his participation under a very optimistic and promising view of the country. “We have instruments and tools for a good start. The opportunities exist, the work is being done and I am very optimistic. I see consistent signs of our resumption, ”concluded the minister.