Extra Revenues from Oil
The Brazilian Petroleum and Gas Institute (IBP), the main spokesperson for the energy industry in Brazil, is closely following discussions regarding the search for additional revenues for the country’s budgetary scenario, particularly measures that could impact the oil and gas sector. We recognize the importance of fiscal balance, but it is essential that any initiatives take into account the sustainability and competitiveness of an industry that is strategic for Brazil. Oil is the country’s top export item, and the sector faces several challenges, such as price volatility, including a drop of USD 20 per barrel in the past 12 months. Furthermore, the sector is already highly taxed: two out of every three barrels produced in the country are directed toward the payment of taxes, fees, and specific levies.
In this context, IBP understands that some measures could be considered for revenue generation, provided they are supported by legality and predictability. Examples include the advance sale of pre-salt oil not yet contracted and holding new exploration area auctions, which could be implemented in ways that attract investment and generate revenue for public coffers.
However, IBP warns that other proposals—such as changing the special participation rates of existing contracts or revising the reference price without fulfilling legal requirements—seriously undermine the legal certainty of contracts and the business environment.
It is imperative that the government acts in strict compliance with current legislation, avoiding measures that in the past have already caused instability, such as the attempted imposition of an export tax on oil without legal basis, which was overturned in court.
Regulatory predictability is essential to attract and maintain long-term investments in a capital-intensive sector. Abrupt measures at this time could have a significant negative impact, including on the ANP exploratory area auction scheduled for June, and on already signed contracts, affecting investor confidence, country risk, and the future of the Brazilian industry.
The oil and gas sector is available to engage in dialogue with public authorities in pursuit of robust and sustainable economic growth, aligned with the development of the industrial production chain that generates jobs, income, and revenues for the Union, States, and Municipalities.
