The battle for the pre-salt oil reserves.
Brazil needs to retain as much of the oil it has discovered as possible. Foreign companies should come from abroad to search for new reserves, not to exploit those that already exist.
In recent days, the bidding process for the Libra oil field in the Atlantic Ocean has shared the attention of Brazilian society with the Supreme Court's ruling on the appeals for clarification.
The government and the President of Petrobras, Graça Foster, support holding the auction, scheduled for October 21st.
They argue that the Brazilian company, with low cash availability due to the growth in fuel imports in recent years, would not have the money to meet the heavy investments required.
Other experts, such as Guilherme Estrella, former Director of Exploration and Production at Petrobras during Lula's government and considered one of the discoverers of the pre-salt layer, believe that holding the bidding process for the Libra Field is a strategic error, since Petrobras invested alone in the discovery of the well.
"Libra has 10 billion barrels of oil already discovered, that's a lot of oil. Our reserve position with the pre-salt layer is very comfortable for the next 20 years. Why open Libra to the participation of foreign companies and foreign interests?", he said at a recent seminar held in Rio de Janeiro.
In the Senate, Senators Roberto Requião (PMDB-PR), Pedro Simon (PMDB-RS), and Randolfe Rodrigues (PSOL-AP) filed a draft legislative decree that prevents the auction from taking place, which must be approved by both houses of Congress.
The three senators also agreed to organize a class action lawsuit against the initiative. And PSOL is preparing a writ of mandamus against the auction to be presented to the Supreme Federal Court.
According to Fernando Siqueira, Vice-President of the Engineering Club and Director of AEPET – the Association of Petrobras Engineers – behind all this lies the ANP's intention to favor foreign companies.
The Libra well, with 15 billion barrels, is actually connected to another well, the Franco well, discovered earlier, with 9 billion barrels.
Therefore, whoever wins the Libra field, auctioned first, could also end up having access to Franco's oil, which would reduce interest (and available reserves) in the event of an auction for the second well.
Another point raised by AEPET is the signing bonus of R$ 15 billion that the winning company will have to pay to the government. Law 12.351 of 2010, which governs the production-sharing regime, stipulates that this bonus cannot be reimbursed.
However, according to Fernando Siqueira, Resolution No. 5 of the National Council for Energy Policy (CNPE) and the production sharing contract drawn up by the ANP allow the bonus to be considered in the calculation of the cost in oil.
This means that the bonus would actually be returned to the company, since it can be deducted from the portion of oil that the winning consortium has to deliver to the government.
Opponents of the measure point out that whoever wins the auction will not be acquiring a block for research, but rather taking over a well where the oil is already practically available, needing only to be measured, something that will be done with technology and equipment from Petrobras itself.
Well, in that case, why not do everything directly with Petrobras? The law allows the government, if it wants, to directly contract the company to explore for this oil without a bidding process. There would be no legal impediment to doing so.
Another point discussed, also in a letter written to be sent to the President of the Republic, is the authoritarian manner in which the format of the tender was decided. Neither “the Ministry of Mines and Energy, the National Energy Policy Council, the National Agency of Petroleum, Natural Gas and Biofuels, nor the Energy Research Company, none of these bodies allowed the public access to documents explaining the perspective of the discoveries, the percentage of oil that will be destined for Brazilian supply or exported, for example.”
The dozens of entities that signed the document argue that Petrobras should develop this well and then calmly move on to exploring the other wells that Brazil has discovered in the pre-salt layer.
It is estimated that the oil discovered so far would be enough to supply the country for the next 50 years.
It's really hard to understand the rush. Brazil's problem today is a lack of fuel, not crude oil. What we need are refineries. If we extracted more oil, we would have to send it abroad due to a lack of refining capacity.
By stimulating car sales without ensuring the source of the fuel, the government shot itself in the foot, a move that now even affects our balance of payments.
When negotiating the new automotive regime with companies, the government should have demanded changes that would reduce our current extreme dependence on fossil fuels.
A cash bonus (in reais) could have been created to encourage mills to massively produce ethanol, which would decrease the supply of sugar on the international market, increasing its price – thus ensuring the domestic supply of sugar with stocks held by the government itself.
And the production of hybrid, electric, or compressed air-powered cars could also have been stimulated in recent years, reducing our dependence on imported gasoline.
Even considering all of this, Brazil needs to keep as much of the oil it has discovered as possible. Foreign companies should come from abroad to search for new reserves, not exploit the ones that already exist.
The major challenge now is to overcome the obstacles hindering the construction of refineries and to invest in the production of domestic fuels, such as ethanol, biodiesel, hydrogen for public transportation, and hybrid and electric cars, for example.