A REVIEW OF THE POLITICAL AND ECONOMIC IMPACTS CAUSED BY THE RECENT CHANGES IN THE REGULATORY FRAMEWORK OF THE OIL AND GAS SECTOR IN BRAZIL

Abstract

The discovery of oil and gas in the Brazilian Pre-salt led to the mobilization of the Brazilian political and economic sectors. With the goal of capitalizing on the Pre-salt, and maximizing growth opportunities, the Federal Government implemented changes in energy-related regulations. In this regard, this paper reviews the main economic and political impacts caused by the changes in the Brazilian regulatory framework that took place in 2010. It also discusses these changes in light of Federal Law 9.478, that went into effect in 1997, the so-called “Brazilian Oil Law”. A primary study was performed in order to gather the implications of this change considering, as major economic factors, oil and gas production, government revenues, modification of sectors which make up the gross national product (GNP), the delay of Pre-salt exploration and production, and investments in research, development, and innovation. As political factors, the following aspects were analyzed: political instability, creation of “Pré-sal Petróleo S.A.”, and capitalization of Petrobras. At last, this paper discusses the positive and negative aspects related to each relevant factor.