Regulation of the Upstream Petroleum Sector

Regulation of the Upstream Petroleum Sector

A Comparative Study of Licensing and Concession Systems

New Horizons in Environmental and Energy Law series

Edited by Tina Hunter

This discerning and comprehensive work will be a useful entry point for students embarking on study in petroleum law. Academics will find this timely examination to be an indispensible overview of upstream operations. Practitioners will find this book an illustrative review of the origins of issues surrounding regulatory frameworks in managing natural resources.

Chapter 8: The Brazilian concession system for petroleum extraction in Brazil

Eduardo G. Pereira

Subjects: law - academic, commercial law, energy law

Extract

The oil and gas history of Brazil goes back even further than the well-known 21st century and the pre-salt discoveries. The first permissions were not granted for oil but rather to explore for and to supply gas in the city of Rio de Janeiro as early as the 1820s and 1830s. The 19th century was probably the most relevant century for the petroleum history of Brazil, with several individuals proving the existence of hydrocarbons in Brazil. These individuals received ‘permissions’ from the emperor throughout the 19th century and these continued to be granted in the 20th century by the relevant presidents, as the regency/imperial period finished with the first republic in 1890. Thus, without the persistency of these individuals our petroleum history could be very different or even never exist as the first onshore commercial discovery was achieved by 1939 and its first offshore discovery later on by 1968. Although the Brazilian upstream sector began as an open market it changed after the creation of the Brazilian state petroleum company, Petrobras, in 1953. Since 1953 no private entity has been authorized to participate in the upstream sector in Brazil. Petrobras was the only company authorized to explore for and produce petroleum as it represented the state’s interests. However, this was altered as a result of the economic turbulence that prevailed in the 1990s, and was stabilized through economic policies to prevent inflation and social gaps (i.e. poverty) and the privatization of certain industry sectors.

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