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The Small Town in the Interior of RJ That Once Was a Reference and Global Power of Oil Exploration Now Runs the Risk of Ending and Becoming the New “Detroit” in Brazil
Macaé, located in the Northern Fluminense, has always been a symbol of growth driven by oil exploration. Its economy is closely tied to the operations of Petrobras and other companies in the sector, with offshore platforms being an essential engine for job creation and local development.
Recently, concerns have arisen about a possible change in the calculation of oil royalties by the ANP (National Agency of Petroleum, Natural Gas and Biofuels). This change, aimed at equalizing the reference values between pre-salt and post-salt, could bring severe economic impacts to the city and the entire Campos Basin.
ANCAPSU
What Are Oil Royalties and How Do They Work?
Royalties are amounts paid by oil exploration companies to the government as financial compensation for the extraction of natural resources. These amounts are distributed among the Union, states, and municipalities, being a vital source of revenue for cities like Macaé, which directly depends on operations in the Campos Basin.
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Offshore industrial demand in Macaé skyrockets with the recovery of oil and gas and could grow by up to 396% by 2026 in the Campos Basin.
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Offshore industrial demand in Macaé surges with the recovery of oil and gas and could grow by up to 396% by 2026 in the Campos Basin.
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The calculation of royalties is based on the reference value of the barrel of oil, defined by the ANP. Currently, there is a differentiation between oil extracted in post-salt and pre-salt areas. What is under discussion is the ANP proposal to unify these values, increasing costs for companies like Petrobras and directly impacting the feasibility of revitalization projects for mature fields.
Macaé’s Dependence on the Oil Sector
Macaé underwent a real economic and social transformation after the discovery of large oil reserves in the Campos Basin. The city’s growth is closely linked to the operation of offshore platforms, serving as a logistics and technical support hub for Petrobras activities.
The city has become highly dependent on oil exploration, and any instability in the sector directly affects the local economy. Service companies, commerce, infrastructure, and even corporate tourism revolve around the oil production chain.
What Is Happening with Oil Royalties?
According to statements from Renata Baruzzi in an interview with Agência Eixos, the ANP is considering a review of the reference prices used for the payment of royalties. The proposal seeks to unify the reference values between fields in the pre-salt and post-salt, which, in practice, would increase the operational costs of offshore platforms in mature fields.
Petrobras and other companies have warned that this increase in the tax burden could economically undermine the continuation of exploration in many mature fields of the Campos Basin.
Economic Consequences for Macaé
If the change is implemented, Petrobras has already indicated that it could abandon or reduce operations in several offshore platforms in the region. This decision would bring a series of negative impacts:
- Job Losses: Reduced activity in the oil sector would result in mass layoffs, both on platforms and in support and service companies in Macaé.
- Decline in Royalty Revenue: With reduced production, the collection of royalties for the municipality would drop drastically.
- Discouragement of Investment: Smaller companies, lacking the financial robustness of Petrobras, could cease operations in the region.
- Deindustrialization and Economic Exodus: The risk of Macaé becoming a new Detroit is real, with the collapse of the local economy.
The Revitalization of Wells and the Impact on the Sector
The concept of revitalization of wells involves extending the useful life of oil wells that have reached or are close to technical exhaustion. This process involves investments to modernize equipment and continue extracting oil from mature fields.
Petrobras has been investing in revitalization projects in the Campos Basin, such as the Marlim, Albacora, Barracuda, and Caratinga fields. However, the proposed review of royalties could jeopardize these projects, as the profit margins in these operations are narrower.
Technical Aspects of the Change in Royalties
The current legislation on royalties is regulated by two main laws:
- Law 9.478/1997: Defined the rules for granting and royalties for oil exploration in post-salt fields.
- Law 12.351/2010: Created during Lula’s administration, regulates the sharing regime in the pre-salt, with higher royalty rates.
What the ANP is now studying is to apply the reference model of pre-salt also to post-salt, even for old concessions. This change does not alter the original contract, but increases the amount of royalties paid, making the maintenance of several platforms economically unfeasible.
Market and Expert Reactions
The decision of the ANP has generated criticism from various sectors. Experts point out that:
- Legal Uncertainty: Changing the rules of old contracts undermines the legal security of the sector.
- Chain Reaction: It affects not only Petrobras, but the entire supply and services chain.
- Discouragement of Investments: It complicates attracting foreign capital and revitalization projects.
Comparison with Detroit: The Alert for Macaé
The comparison of Macaé with Detroit is a serious warning. Detroit, in the United States, was the epicenter of the American automotive industry until suffering an economic collapse with the migration of automakers. The city saw entire neighborhoods abandoned, leading to poverty and urban decline.
If the review of royalties is implemented and results in the abandonment of platforms, Macaé risks following the same path, losing its economic relevance and facing high unemployment rates and business exodus.
The Future of Macaé Is at Stake
The ANP’s proposal to review the reference prices of oil royalties could represent a serious risk to the economy of Macaé and all of Northern Fluminense. Petrobras and other companies have already expressed concern about the financial and operational impact of the measure, warning about the risk of closing offshore platforms.
To prevent Macaé from becoming a Brazilian Detroit, it is essential for authorities to rethink this change, seeking a balance between tax revenue and maintaining local economic activity. After all, what is more important: to collect more in the short term or to ensure sustainable economic development in the long term?
What do you think? Is raising oil taxes truly the best solution for Brazil?
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