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He Also Complements That If PT Returned to Power, It Would Be a Setback for All That Has Been Done in the Last 4 Years Until Now and That Bolsonaro’s Energy Plan Is the Most Viable at the Moment
The Oil Industry in Brazil Remained Cautiously Optimistic Before the Second Round of Voting This Sunday (28) in This Year’s Presidential Election Cycle, with Former Military Officer Jair Bolsonaro Still Leading the Polls, Though with a Narrow Margin Over the Workers’ Party Candidate, Fernando Haddad. Bolsonaro Won the Election with 56.70% of the Votes, While Haddad Lost with 44.46%.
The Weak Economic Growth of Brazil, Rising Unemployment, and Rampant Violence Dominated Most of the Campaign Season, with Energy Policy Seen as a Late Reflection Among the Country’s Electorate. The Two Candidates, However, Held Such Differing Views on the Development of Brazil’s Offshore Oil Wealth and Refined Product Markets That Concerns Were Raised About Where Policy Could Be Taken.
“Bolsonaro Represents the Current Favorable Status Quo, Though There May Be Some Bumps Along the Way”, A Recent Oil Industry Executive Told S & P Global Platts, Noting Occasionally Controversial Comments That Trigger Comparisons With U.S. President Donald Trump. “But a Return of PT to Power Would Definitely Represent a Step Backward and Would Likely Lead to a Slowdown in the Recovery We Have Seen Since Last Year.”
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Government unlocks R$ 554 million for a highway that has been requested for decades and accelerates the duplication of BR.
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Without bricks, without cement, and without endless construction: the cardboard house that is assembled in modules and can be moved.
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Billions of barrels on the equatorial margin could lead Amapá to double its oil production in Brazil — the state aims to enter the route of companies in the Campos Basin, attract investments, and boost jobs and businesses in the oil and gas sector.
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Without bricks, without cement, and without endless construction: the cardboard house that is assembled in modules and can be moved.
Bolsonaro’s Energy Plan Captivated the Market
Bolsonaro Introduced a Policy Plan for His Potential Government in Early October Shortly After the First Round, Indicating That He Supported a Government-Led Inquiry Into the State Company’s Management, as Well as a Review of the Country’s Production Sharing Regime for the Pre-Salt Fields. The Plan Reinforced Expectations That Bolsonaro Would Likely Continue with the Reform Efforts That Attracted Investments from Heavyweights Like BP, Equinor, ExxonMobil, Shell, and Total.
The Current Government Returned to a Fixed Schedule of Bidding Rounds Under Concession and Production Sharing Contracts, Opened Pre-Salt Fields Sold Under Production Contracts for Operation by International Oil Companies Instead of Petrobras, and Reduced Requirements to Use Locally Produced Goods and Services in Exploration and Development. The Reforms Prompted Intense Competition in Six Auctions Held in 2017 and 2018, Generating Record Signing Bonuses and Profit Guarantees for the Government, with Activity Expected at 50% for 5.5 Million B/D by the Mid-2020s.
While Bolsonaro Promised to Continue the Fight Against Government Interference in Petrobras and the Industry, Market Talk That He Was Considering Appointing a General as CEO of Petrobras Raised Concerns About Previous Promises to Maintain Management in State Entities Under Specific Industry Leadership. The Current President of Petrobras, Ivan Monteiro, and His Predecessor, Pedro Parente, Were Praised for Their Market Turnaround at the Company Following the Corruption Scandal That Led to the Lava Jato Investigation, So a Change in Management Could Be Seen as a Step Backward.
Bolsonaro Claims to Be Concerned About the Chinese
Bolsonaro Has Also Been Very Critical of China’s Investments in Brazil, Saying That Asian Investors Are Snapping Up Local Assets at a Low Price. The Candidate Stated That He Wants to Limit Foreign Ownership in Strategic Areas Such as Power Generation.
China’s CNPC and CNOOC Are Partners in the Offshore Libra Field, the First Area Sold Under the Country’s Production Sharing Regime. CNPC and Petrobras Also Recently Reached an Agreement Where the Chinese Company Could Have a 20% Stake in the Unfinished Comperj Refinery and the Marlim Field Revitalization Project.
Bolsonaro Also Supports Petrobras’ Divestment Plan, Which Could End Legal Actions and Disputes That Derailed the Company’s Asset Sale Program of US$ 21 Billion Between 2017 and 2018. Bolsonaro Wants Petrobras to Go Even Further, Reducing the Monopolistic Stakes the Company Holds in Areas Such as Refining, Distribution, Logistics, and Transportation.
Haddad Wanted to Reverse Everything That Has Been Done So Far
Haddad, For His Part, Is in Favor of Returning to the State-Led Development Model Implemented by Former PT Presidents Luiz Inácio Lula da Silva and Dilma Rousseff.
The Candidate Would Reverse the Changes Made to the Production Sharing Regime in 2016 That Removed the Requirement for a Single Operator, Forcing Petrobras to Hold at Least a 30% Operational Stake in Each Field Sold Under Production Sharing Contracts. The Company Requested the Change Because It No Longer Had the Funds to Finance Investments, Which Reduced the Pace of Development.
Haddad Also Wants to Force Oil Companies to Purchase Equipment and Services from Brazilian Companies. The Local Content Rules, Implemented in the Early 2000s in an Effort to Create a Robust Service Industry in Oil Fields, Ultimately Caused Cost Overruns and Delays in Development When Brazilian Companies Could Not Efficiently Meet the Growing Demand.
Despite Haddad’s State Leadership, Most Oil Sector Executives Interviewed by Platts Said That the Candidate Would Likely Take a More Pragmatic Approach If He Won, Honoring Contracts from Recent Bidding Rounds and Continuing with the Current Bidding Schedule, Though With Some Changes Related to Petrobras’ Role in the Pre-Salt. Source of Publication: Global Platts
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