The oil industry received with great dissatisfaction the news that the government will start taxing crude oil exports. For companies in the sector, this changes the profitability of several projects and puts the continuity of exploration at risk.
Brazil sells around 700,000 barrels of crude oil per day abroad. It is the third most important item in the export basket. There was almost US$ 21 billion in trade surplus with this product in 2022 alone.
According to oil multinationals interviewed by the CNN the measure announced this Tuesday afternoon (28) significantly changes the premises of the projects offered in auctions organized by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
When a block is put up for auction, companies calculate what the sector’s industry calls “government take” — that is, how much of the production value remains with the government in taxes, fees, royalties and special participations.
In the case of contracts under a sharing regime, in the pre-salt layer, the oil profit value is also calculated (a percentage of the barrels produced that go to the state-owned PPSA). It is based on these estimates that an investment plan is drawn up for the auctioned project, explains a senior industry executive, in a reserved manner.
In a press conference, the Minister of Finance, Fernando Haddad, announced a 9.2% rate on crude oil exports. The taxation will be valid for four months, at least, and it will be up to the National Congress to decide on its eventual continuation.
According to the minister, it was a way to only partially recompose the return of fuel taxes, but without causing negative impacts on collection.
The oil companies, however, see it as a measure that causes instability in the sector and even speak of “breach of contract”. For this reason, with prudence, they have already mobilized their lawyers to analyze whether any type of judicial challenge would be appropriate.
What is certain is that the companies intend to make an offensive in the Chamber of Deputies and in the Senate to overthrow the taxation. Even if the provisional measure announced this Tuesday is not approved, the rate on exports will be valid for 120 days.
An industry source recalled that the measure is far from affecting only Petrobras or the large multinationals that operate oil fields in Brazil, such as the British Shell, the American Exxon Mobil, the French Total and the Norwegian Equinor.
Brazil has about 40 independent producers, operating small onshore blocks that have been offered in ANP auctions or were recently sold by Petrobras. Today these producers extract 150,000 barrels a day and sell practically all of their production abroad.
In total, the industry generates 445,000 direct jobs. According to an executive, the government’s measure changes the economic scenario of oil and gas projects, which have long-term maturation. He recalls that oil production begins eight to ten years after the exploratory campaign and that all investment is made based on the profitability of the projects.
Source: CNN Brasil
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