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Agreement between Petrobras and Cade enables the opening of the natural gas market

Energy

Through TCC, Petrobras is committed to liberate access to the essential infrastructure for the sector

The Administrative Council for Economic Defense (Cade) and Petrobras signed on Monday (8/7) Term of Commitment of Cessation (TCC) in which Petrobras is committed to liberate access to the country's gas pipelines and to all the infrastructure essential to the natural gas sector such as pipelines, processing units and Liquefied Natural Gas (LNG) terminals. 

Under the agreement, Petrobras also undertakes to give up its stake in 19 of the 27 state distributors, which have the exclusive concession for the distribution of natural gas to the final consumer. In Brazil, distribution is a monopoly of state governments. The measure is one of the steps for the implementation of the new gas market -  announced by the government last June  - which foresees the breach of Petrobras' monopoly and the improvement in the regulation of the transportation and distribution of natural gas in the country. 

According to the government, the agreement represents a convergence of opportunities, since with the measure the market will gain competitiveness and Petrobras will be able to focus resources and human capital in its main activity: production and extraction in deep waters. On the other hand, the processes that Petrobras responds in Cade for anticompetitive practices in the gas sector will be finalized.  

The main objective of the government with the new gas market - which has been called by the Minister of Economy, Paulo Guedes, of "cheap energy shock" - is to reduce the costs of energy and of all industrial production, generating a substantial reduction of cost of Brazilian industry.  

"What we are seeing today is competition being implemented as an important value for the society of this country. The new gas market and the new energy shock are a strategy that the Ministry of Economy has been very concerned about generating direct benefits for the citizens along with the Ministry of Mines and Energy. It is a political element, it is an element of public policy. What we are doing is generating more competition, more freedom and more economic efficiency, "said Marcelo Guaranys, the executive secretary of the Ministry of Economy, during a press conference on Monday. 

"Competition is important for prosperity - that's one of our mottos - it's competition for growth, competition for jobs, competition to benefit the final citizen with products with higher quality and lower price. "   

As around 20% of total cooking gas (LPG) originates from natural gas, the measure has the potential for the reduction to reach also the cylinder gas used by households. 

Marketplace 

In Brazil, all segments of the natural gas production chain - production, outlets, processing, transportation, loading and distribution - have always been under strong control of Petrobras, which means that the price operated in the country is monopoly. The scenario reduced the interest of other companies to produce the gas in Brazil since, in practice, they ended up compelled to sell their production to Petrobras, precisely because of the control that the state owned the chain of transportation and distribution. 

The expectation of the Ministry of Economy with the opening of the market is the reduction of the price of natural gas in the country at international levels. Currently, Brazilian gas is the most expensive in Latin America. While in Brazil the industry pays almost US $ 14 per million BTU, in Europe this value is around US $ 7 to 8 per million BTU, while in the US it is less than US $ 4 per million BTU.