pre-salt # exploiting brazil’s petroleum reserves
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The Center for Latin American Issues – George Washington University – Washington, DC – June 6th., 2012TRANSCRIPT
Claudio A. Pinho
Exploiting Brazil’s Petroleum Reserves
The Center for Latin American Issues – George Washington University – Washington, DC – June 6th., 2012
Claudio A. Pinho
Energy Consumption 2010-2030 Scenario
Claudio A. Pinho
Energy Consumption 2010-2030 Scenario
2010*
* BP Statistical Review of World Energy 2011
Projections**
** International Energy Outlook 2011US Energy Information Administration
Claudio A. Pinho
Energy Consumption 2010-2030 Scenario
2010*
* BP Statistical Review of World Energy 2011
• Usually wind, solar and biomass are included in renewables, but hydro still the main source of renewable energy (fact)
• Together fossil fuels represent 86-88% of world energy consumption matrix (fact)
Claudio A. Pinho
Energy Consumption 2010-2030 Scenario
Projections**
** International Energy Outlook 2011US Energy Information Administration
• Renewables will change in 2030 for 20%
• Fossil fuels will decrease to 64% and natural gas will have a share of 42%
• In absolute numbers the increase of energy consumption from 2012 to 2030 is equivalent what US consumes today
Claudio A. Pinho
Oil & Gas is not only energy
Oil products (refining)
Claudio A. Pinho
• Oil sands in Canadá
What changed a few years ago?
Claudio A. Pinho
• Oil sands in Canadá
• China energy policy
What changed a few years ago?
Claudio A. Pinho
• Oil sands in Canadá
• China energy policy
• Pre-Salt in West Africa
What changed a few years ago?
Claudio A. Pinho
• Oil sands in Canadá
• China energy policy
• Pre-Salt in West Africa
• Fracking (or Fracturing technology) in shale Gas
What changed a few years ago?
Claudio A. Pinho
• Oil sands in Canadá
• China energy policy
• Pre-Salt in West Africa
• Fracking (or Fracturing technology) in shale Gas
• LNG (Liquid Natural Gas)
What changed a few years ago?
Claudio A. Pinho
• Oil sands in Canadá
• China energy policy
• Pre-Salt in West Africa
• Fracking (or Fracturing technology) in shale Gas
• LNG (Liquid Natural Gas)
• Solar and Wind technologies are improving
What changed a few years ago?
Claudio A. Pinho
• Oil sands in Canadá
• China energy policy
• Pre-Salt in West Africa
• Fracking (or Fracturing technology) in shale Gas
• LNG (Liquid Natural Gas)
• Solar and Wind technologies are improving
What changed a few years ago?
Claudio A. Pinho
• Oil sands in Canadá
• China energy policy
• Pre-Salt in West Africa
• Fracking (or Fracturing technology) in shale Gas
• LNG (Liquid Natural Gas)
• Solar and Wind technologies are improving
• US geopolitics axis
What changed a few years ago?
Claudio A. Pinho
Changing US Geopolitics
Claudio A. Pinho
Changing US Geopolitics
Claudio A. Pinho
Huge oil & gas fields
Located under 16,400 - 22,900 feet of sea level (approximately 5.000 - 7.000 meters)
Ultra-deep water drilling (under 6,500 feet or approximately 2,000 meters)
Under a pre-salt layer of 6,000 feet thick (average)
Pre-SaltPre-Salt
Corcovado
Mountain
Corcovado
Mountain
10,000 ft
6,500 ft.
Salt
• 2008 – First pre-salt discoveries
• Brazilian oil reserves estimated to be 14 billion barrels • Pre-Salt area reserves estimated to be more than 20 billion barrels
Brazilian Pre-Salt
Claudio A. Pinho
Pre-salt area
Tupi
Block
Brazilian Pre-Salt
Claudio A. Pinho
1988 Constitution and its Provisions
The natural resources all belong to the Federal Government
the continental shelf the exclusive economic zone the territorial sea the mineral resources including those of the subsoil
The economic order establishes the principle of free competition.
Claudio A. Pinho
Oil&Gas Legal Framework before Pre-Salt
Amendment # 6 (Aug. 1995) Revoked article 171 which gives the Brazilian Companies some privileges.Amendment # 9 (Nov. 1995) Changed the article 177 to break the Petrobras monopoly and allow competition.Law # 9.478/97 [Brazilian Oil Law] (1997) Created ANP (National Petroleum Agency) and the rules for bid and contracting (concession model)
Direct Action of Unconstitutionality (ADIN # 3.273) (2011) Brazilian Supreme Court declares Brazilian Oil Law constitutional, and declares that oil & gas exploration can only happen in a competitive marketplace.
Claudio A. Pinho
Pre-Salt Bills
Federal Government sends 3 bills to Brazilian Congress to create the Pre-salt legal framework:
1) Regulatory pre-salt law (changing the contracts to Production Share Agreement and defines thepre-salt area);2) A bill to create a state company called PPSA (Pré-Sal Petróleo S/A) to work as the National Oil Company (NOC) in pre-salt contracts;
3) Capitalization of Petrobras and onerous transfer of rights.
Claudio A. Pinho
Production Sharing Agreement Model
NOC IOC
COSTS
60% 40%
Claudio A. Pinho
IOC
COSTS
60% 40%
30% Petrobras 70% Consortium
NOC
1st bill => Law # 12.351/10
Pre-Salt Production Sharing Agreement
Claudio A. Pinho
PPSA IOC
COSTS
60% 40%
30% Petrobras 70% Consortium
2nd bill => Law # 12.276/10
Pre-Salt Production Sharing Agreement
Claudio A. Pinho
PPSA IOC
COSTS
60% 40%
30% Petrobras 70% Consortium
5 Billi
on Barre
ls
3rd bill => Law # 12.304/10
Pre-Salt Production Sharing Agreement
Claudio A. Pinho
Pre-salt Perimeter
• Does the onerous transfers of rights is a regulatory framework itself?
• Petrobras answers “yes” and the industry and the Government accepted that idea.
Claudio A. Pinho
• With the new Director, Magda Chambriard, ANP (Brazilian National Petroleum Agency) is returning to its regulatory role
What will happen, what will not & challenges
Claudio A. Pinho
• With the new Director, Magda Chambriard, ANP (Brazilian National Petroleum Agency) is returning to its regulatory role
What will happen, what will not & challenges
Claudio A. Pinho
• With the new Director, Magda Chambriard, ANP (Brazilian National Petroleum Agency) is returning to its regulatory role
• A bill of National Contingency Plan is almost ready to be filed (PNC Plano National de Contingência) with new liability standards (probably will be a Presidential Decree)
What will happen, what will not & challenges
Claudio A. Pinho
Energy Tribune December 1st, 2011
What will happen, what will not & challenges
Claudio A. Pinho
• With the new Director, Magda Chambriard, ANP (Brazilian National Petroleum Agency) is returning to its regulatory role
• A bill of National Contingency Plan is almost ready to be filed (PNC Plano National de Contingência) with new liability standards (probably will be a Presidential Decree)
• In 2013 Brazil will bid for new blocks in pre-salt legal framework offshore and maybe onshore
What will happen, what will not & challenges
Claudio A. Pinho
McClatchy – March 8th, 2012
McClatchy March 8th, 2012
What will happen, what will not & challenges
Claudio A. Pinho
• With the new Director, Magda Chambriard, ANP (Brazilian National Petroleum Agency) is returning to its regulatory role
• A bill of National Contingency Plan is almost ready to be filed (PNC Plano National de Contingência) with new liability standards (probably will be a Presidential Decree)
• In 2013 Brazil will bid for new blocks in pre-salt legal framework offshore and maybe onshore
• Royalties in the new legislation are far to be solved
What will happen, what will not & challenges
Claudio A. Pinho
• With the new Director, Magda Chambriard, ANP (Brazilian National Petroleum Agency) is returning to its regulatory role
• A bill of National Contingency Plan is almost ready to be filed (PNC Plano National de Contingência) with new liability standards (probably will be a Presidential Decree)
• In 2013 Brazil will bid for new blocks in pre-salt legal framework offshore and maybe onshore
• Royalties in the new legislation are far to be solved
• There is no policy for independent producers
What will happen, what will not & challenges
Claudio A. Pinho
• With the new Director, Magda Chambriard, ANP (Brazilian National Petroleum Agency) is returning to its regulatory role
• A bill of National Contingency Plan is almost ready to be filed (PNC Plano National de Contingência) with new liability standards (probably will be a Presidential Decree)
• In 2013 Brazil will bid for new blocks in pre-salt legal framework offshore and maybe onshore
• Royalties in the new legislation are far to be solved
• There is no policy for independent producers
• Onshore gas could make the difference
What will happen, what will not & challenges
Claudio A. Pinho
• Brazilian FTC (CADE) does not really enforce antitrust law in oil&gas market (Law 12,529/2011 came into force last May 29th)
What will happen, what will not & challenges
Claudio A. Pinho
Pre-Salt - Part. 1-3 - Claudio A. Pinho
Pre-Salt - The new Oil Regulation in Brazil -
Manhattan Connection
pre-salt references
Claudio A. Pinho
@ClaudioAPinho
Thank you!
This presentation is posted at www.slideshare.net/capinho