Pre-Salt Petroleum State Company (PPSA) Records Record Revenue For The Union With Oil Sales

Pré-Sal Petróleo (PPSA) Registers Record Revenue This Year. The Expectation Is That Values Will Increase Significantly in the Coming Years

In the first months of this year, Pré-Sal Petróleo (PPSA) achieved billion-dollar revenue from the commercialization of gas and oil that belongs to the Union, totaling R$ 1.23 billion. According to a statement from the state company, the amount collected in 2022 is a record, surpassing by 1% the amount collected last year.

Union Collects Billions with PPSA Contracts 

The oil from the contracts of the pre-salt fields of Mero, Tupi, and Sapinhoá was sold to Petrobras, which won the cargoes in an auction held on the B3 Stock Exchange. The commercialization of 19 more cargoes of 500 thousand barrels each is scheduled by the end of this year, representing more profit for the Union.

Active since 2013, PPSA has already raised R$ 5.21 billion for the Union, with R$ 3.9 billion from commercialization and R$ 1.3 billion from the Equalization of Expenses and Volumes (EGV).

Pré-Sal Petróleo (PPSA) was created in 2013. The goal of the state company is to manage the production sharing contracts and oversee the commercialization of oil and natural gas. Additionally, it works on behalf of the Union in the agreements.

Government Studies Privatization of PPSA 

Last month, Adolfo Sachsida, Minister of Mines and Energy, submitted a request to Paulo Guedes, Minister of Economy, to begin studies for the privatization of Petrobras and Pré-Sal Petróleo S.A. (PPSA). It is important to highlight that PPSA is already included in the Investment Partnerships Program.

Experts emphasize that, if approved, the sale of Union rights in sharing regime contracts could generate billion-dollar revenue for the Union’s coffers in 2022.

According to FGV IBRE, the expectation is that the Union will collect about R$ 334 billion between 2023 and 2030 with PPSA’s sharing regime contracts. Bráulio Borges, a researcher at the Institute, pointed out that it is unreasonable for the government to anticipate the values at this time. 

“It’s oil that hasn’t even come from the bottom of the sea… Whoever buys these contracts will look at the projected price of oil over the next ten years, and the consensus projection is that oil will be around 70 dollars a barrel in the medium and long term, already adjusted for dollar inflation,” he told Reuters. 

The proposal for studies on the privatization of Petrobras and PPSA comes amid movements for a potential privatization of the state company. On the other hand, President Jair Bolsonaro himself highlights that the privatization of the state company is very difficult and time-consuming, potentially taking up to four years to materialize.