{"id":35640,"date":"2022-02-15T15:53:38","date_gmt":"2022-02-15T18:53:38","guid":{"rendered":"https:\/\/www.ccbc.org.br\/publicacoes\/uncategorized\/os-rumos-do-setor-energetico-no-brasil\/"},"modified":"2023-02-09T08:55:22","modified_gmt":"2023-02-09T11:55:22","slug":"the-future-of-the-energy-sector-in-brazil","status":"publish","type":"post","link":"https:\/\/www.ccbc.org.br\/en\/publicacoes\/news-ccbc\/the-future-of-the-energy-sector-in-brazil\/","title":{"rendered":"The future of the energy sector in Brazil"},"content":{"rendered":"

CCBC\u2019s Legal Affairs Committee promotes a seminar to debate petroleum bids in the context of the transition to a model focused on renewable energy sources<\/em><\/h2>

 By S\u00e9rgio Siscaro<\/p>

The latest oil and gas blocks\u2019 bidding round promoted by the National Oil, Gas and Biofuels\u2019 National Agency (ANP) in October 2021 indicated a decrease in investors\u2019 interest. Only five of the ninety-two blocks auctioned were bought \u2013 all in the Santos Bay -, while Petrobras itself did not present any bid at the time. Could it be a sign of a preference for renewable energy sources and the gradual rejection of fossil fuels?<\/p>

The Legal Affairs Committee (CAJ) of the Chamber of Commerce Brazil-Canada (CCBC) promoted a virtual seminar, on late January, to discuss the subject considering the current worldwide search for renewable energy sources: Global energetic crisis: Is there a future for ANP\u2019s block auctions? <\/em>Three experts of the oil and gas field led the debate: lawyers Gabriela Bezerra Fischer (Trench, Rossi & Watanabe) and Marcello Lobo (Pinheiro Neto Advogados) and ANP consultant and former director John Forman (J. Forman Consulting). CAJ\u2019s coordinator Alberto Murray mediated the debate.<\/p>

High demand<\/h2>

According to Forman, the sector lacks interest in the blocks offered, not in ANP\u2019s auctions, once companies are often aware of the most promising areas for oil supply. \u201cToday, geological information is substantially more precise. Considering oil is discontinuously present within the blocks, companies are often uninterested in bidding\u201d, he affirmed.  <\/p>

Forman also asserted that international oil and gas prices are up after a drop caused by the Covid-19 pandemic. He ponders that this strengthens the argument that the demand for fossil fuels is still high.<\/p>

Transition<\/h2>

Gabriela Bezerra Fischer emphasized the importance of a stronger growth of the current energy source transition process \u2013 from fossil fuels to renewable \u2013 identified worldwide in the last couple of years. \u201cThe alignment to an ESG (Environment, Social and Governance)] agenda is increasingly more important for banks and other financial institutions. This is transforming the industry \u2013 and the tendency is that companies will structure themselves in accordance with the ESG agenda\u201d, she affirmed.<\/p>

However, Fisher added, this tendency does not equal a disinterest in auctions for oil and gas exploration areas: \u201cThe energetic transition is a reality, a real concern, but it is a long-term reality. This does not mean that companies will be abruptly disinterested in auctions and suddenly targeting only renewable energies. However, it is important to consider the environmental sensibility of some sectors and this transition context\u201d.<\/p>

Strategic shift<\/h2>

This transition could be impacted by each country\u2019s internal factors. Lobo mentioned that Brazil has privileged renewable energy sources, once practically half of the country\u2019s energy is produced by hydropower plants. \u201cBut we need to guarantee our energetic safety. For that reason, the energetic transition cannot be a simple turn of a key. It must be made smartly and strategically\u201d. Lobo added that the oil and gas sector has a fundamental role in enabling this transition.<\/p>

The lawyer stressed the importance of Brazil learning from past mistakes \u2013 as in the case of the subsidised wind power model, which was unfeasible. \u201cIn the oil sector, we have seen excessively optimistic local content policies which considered Brazilian industry\u2019s capable of meeting the demand and that did not work. We need to focus more in enabling private investments than in governmental interference\u201d.<\/p>

Readers interested in the full debate can access the webinar here<\/strong>.<\/p>

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