State-owned pre-salt forecasts to move R$ 832 billion in ten years

In view of the frustrated privatization program of the Jair Bolsonaro (PL) government, the state-owned company responsible for managing the Union’s share in the pre-salt fields should be strengthened in the Lula government.

Called PPSA (Pré-Sal Petróleo SA), the company was created during the Dilma Rousseff government to oversee the so-called pre-salt production sharing contracts, which guarantee the Union part of the oil extracted.

There are currently 19 contracts of this type, which will guarantee a collection of US$ 334 billion (R$ 1.77 trillion, at the current exchange rate) in the coming years, according to a study released this Tuesday (29) by the state-owned company.

The amount refers to royalties and taxes levied on an estimated production of 7.7 billion barrels of oil and revenue from the sale of the portion of this production that belongs to the Union, estimated at 1.9 billion barrels.

Only the sale of Union oil represents US$ 157 billion (R$ 832 billion) over the next ten years, according to PPSA. These resources are managed directly by the state-owned company, which has been holding auctions to sell volumes.

The Bolsonaro government even considered the privatization of the sharing contracts, anticipating the receipt of the resources foreseen for the coming years, but the process did not go ahead. In Congress, government allies are trying to put an end to this type of contract.

The president-elect’s government program, on the other hand, talks about strengthening production sharing contracts and expanding state investments in the oil sector.

“We are strongly opposed to the ongoing privatization of Petrobras and Pré-Sal Petróleo SA”, says the text submitted to the Electoral Court. “It is necessary to preserve the sharing regime, and the pre-salt social fund must be, once again, at the service of the future”, he continues.

At an event to release projections for the next ten years, the president of PPSA, Eduardo Gerk, avoided commenting on the impacts of Lula’s election on the state-owned company. “The PPSA complies with the policies that come from the government and will continue to carry out its functions,” he said.

In addition to the sale of oil and gas, the company is responsible for overseeing the contracts, which have expected investments of US$ 72.5 billion (R$ 384 billion) over the next ten years, with the contracting of 21 new platforms and 319 wells. of oil exploration and production.

In the coming years, the company will also have a greater share of the Brazilian natural gas market. Today, it sells to Petrobras the 200,000 cubic meters per day it is entitled to in the pre-salt fields.

The idea is also to bid on new gas sales contracts when production grows. The expectation is that, by the end of this decade, sharing contracts will yield between two and three million cubic meters of natural gas per day to the government.

In the release note of the study, Gerk says that the company is preparing for an “escalation”. In this sense, it is preparing a competition to hire 101 new civil servants, more than doubling the current staff of 86 vacant positions and four directors.

The forecast is to launch the tender by the end of 2023, with hiring for the beginning of 2024. The increase in vacancies has already been authorized by the government, but Gerk stressed that the final decision will now be up to the new management of the state-owned company.

The PPSA management was not sought out by the new government’s transition team, which was on Monday (28) at Petrobras, which is a partner in the largest pre-salt contracts.

Present at this Tuesday’s event, the Minister of Mines and Energy, Adolfo Sachsida, defended that the new government maintain regulatory stability, a competitive market and continue to improve legal frameworks in the energy sector.

“I wish the best luck in the world for the new government and the new teams,” he said. “But it is important that old mistakes are not committed”, he added, not wanting to identify which mistakes he was referring to.