Sadia is one of the world’s leading producers of chilled and frozen foods. Established in Brazil in 194...
Cyrela Brazil Realty is the largest residential real estate developer in Brazil. Considered one of the m...
Today, Banco do Brasil is the largest financial institution in the Country with 24.4 million clients and ...
CPFL Energia is a holding company in Brazilian electricity sector, operating through its subsidiaries in ...
Copersucar S.A. is the largest Brazilian sugar, ethanol and bioenergy company and a significant player in...

Pre-salt profits will result in more investments in education and health

Oil and gas

Part of the money from the oil exploration will be divided with Union, states and municipalities. Verba has great social weight

Financial compensation paid by companies after oil exploration, royalties help to boost the economy, finance public services - such as health and education - and in some cases are essential for the places that have the main source of income in the exploratory activity and financing. 

By the current rules, part of the profit obtained during the exploration of the oil is divided between the Union, state and municipal governments. In addition to the signature bonus that companies must give in the auction, they also need to offer a minimum percentage of the oil extracted to the Union, according to the sharing regime.

With the return of oil auctions, especially the pre-salt rounds, the expectation is that these resources will again generate benefits for society. In the accounts of the National Petroleum, Natural Gas and Biofuels Agency (ANP), scheduled rounds up to 2019 are expected to generate profits in excess of US $ 100 billion.

 Financial reinforcement and social impacts

Antônio Guimarães, Executive Secretary of Exploration and Production of the Brazilian Petroleum, Gas and Biofuels Institute (IBP), emphasizes the positive impacts of pre-salt profits, in addition to their fiscal effects, since these resources are also significant. , in the areas of health and education.

"In addition to the economic impact, the distribution of royalties has a very large social weight, with the planned allocation of part of the pre-salt resources for health and education, as well as strengthening the Union, states and municipalities in a moment of fragility which must last for some time, "he said.

States such as Rio de Janeiro, whose economic activity is closely linked to the exploration of oil and natural gas, are now living under the expectation of resuming these revenues within the next few years. Only with pre-salt auctions, the estimate is R $ 2.5 billion in royalties per year in the next decade, according to the Brazilian Association of Petroleum Services Companies (Abespetro).

As the mayor of Macaé, Aluízio Junior points out, is a municipality whose economy is directly dependent on oil dividends. " Today oil represents 30% of the Gross Domestic Product of the state of Rio de Janeiro, and for that region it is almost the economic anchor," he said. " The expectation now is that this industry will pick up again. It's as if this industry could re-emerge from these new auctions," he added. 

How are royalties calculated?

Dividends are paid to the national treasury until the last day of the month following the month in which the production occurred. They are then  passed on to beneficiaries. The  payment is calculated based on the rate of the producer field, which varies from 5% to 10%, in the monthly production and in the reference price of this raw material.

What about pre-salt? How it works?

The tax rate on production, in the case of both oil and natural gas, is 15% . Because it has a lower investment risk, since the possibility of finding  oil in these areas is very high, the percentage is higher.

Source: Government of Brazil, with information from  ANP ,  Abespetro  and  Casa Civil