Macaé, Búzios, and Arraial do Cabo Achieve Largest Royalty Revenue in Brazilian History

With The Dollar Higher And Increasing International Oil Prices, Brazil’s Revenue From Royalties And Government Participation In Oil And Gas Production Reached A Record Level In 2021

Macaé, Búzios, and Arraial do Cabo have much to celebrate. The three cities set a record for oil royalties revenue in history, since operations began in 1999. The figures consider data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

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According To ANP, According To The Info Royalties Database, Búzios Received R$ 174 Million So Far, Arraial do Cabo R$ 112 Million, And Macaé R$ 730 Million.

Macaé Receives The Highest Amount In History

The Amount Of R$ 730 Million Collected By Macaé, The City Of Oil, Is Greater Than In 2020 With An Increase Of R$ 200 Million, And It Also Accumulates A Higher Balance Than In 2019, The Previous Record. In Other Words, Maintaining The Average Of Recent Years, An Additional R$ 100 Million Will Reach The City Hall’s Accounts.

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This Includes Both The Royalties And The Special Participation, Which Is A Type Of Tax On Profit, From High-Productivity Wells.

In Búzios, The Exact Amount Collected Was R$ 174,561,165.58. This Amount Exceeds The Entire Year Of 2020 By R$ 77 Million. Arraial do Cabo Reports R$ 112,704,160.27, About R$ 33 Million More Than The Previous Year.

Dollar Rise And The Barrel Price In The International Market Helped Fill The “Piggy Banks” Of Municipalities

With The Dollar Higher And Increasing International Oil Prices, The Country’s Revenue From Royalties And Government Participation In Oil And Gas Production Reached A Record Level In 2021, And It Can Provide An Extra Revenue Of Over R$ 37 Billion For The Public Coffers In Comparison To 2020. This Is Shown In A Survey By The Brazilian Infrastructure Center (CBIE).

According To The Consultancy’s Study, The Revenue Of The Union, States, And Municipalities From This Type Of Collection Totaled R$ 35.29 Billion In The Year-to-Date Partial Up To July, An Increase Of 28.9% Compared To The First 7 Months Of Last Year. This Is The Highest Nominal Amount For The Period In The Historical Series, Which Began In 1999. The Previous Record Was In 2019, When The Revenue From January To July Totaled R$ 30.69 Billion.

The Figures Consider Data From The National Agency Of Petroleum, Natural Gas And Biofuels (ANP), Including All Revenue From Royalties, Special Participation, Occupation Or Area Retention Fee, And Signing Bonuses.

Understanding Royalties

Royalties Are The Cash Payments Made By Oil Companies To The Union And To The State And Municipal Governments Of Producing Areas For The Right To Explore Oil. Special Participation Are Additional Compensation Charged When There Are Large Production Volumes Or High Profitability. These Values Are Part Of The So-Called Non-Managed Revenues And Basically Depend On Three Factors:

1. Oil Price
2. Exchange Rate
3. Production Volume