Oil and Development

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Brazil, the Crisis and the Pre-Salt Petroleum

The world economic crisis has shifted the focus of the Brazilian media from the most relevant issue from the energy, economic and social points of view in the next decades in Brazil: the pre-salt petroleum

The crisis has brought down oil prices as well as that of other commodities with important effects on the Brazilian trade that depends on these goods.

Concerning the crisis, Brazil is one of the few countries in the world that does not need to carelessly invent where to invest in order to maintain its economic activities. A plan has been already put in practice aiming at growth.

The investment plans for creating jobs and reduce taxes, even though reactivating the economy for some time, tend to be quickly drained if there are no results in the short or medium term concerning the resources injected in the economy. Furthermore, they aggravate the fiscal deficit even in countries with an enormous financial capacity as the United States and they have limitations, some times drastic ones, in the real economy.

Even considering the oil prices drop, the pre-salt investments offer an opportunity of guarateed return in the medium term of a product that has vital importance in the world economy and therefore it is a rare opportunity for investing in the crisis scenario. This extraordinary circumstance emphasizes the importance of the decision to be taken in Brazil regarding the new Petroleum Law.

Aiming at supporting this discussion, we present some thoughts about some basic points concerning the definition of the new oil policy and the modifications to be introduced in the Law. The content of the present issue exceeds the standards of our periodical, namely: the number of pages; the size reserved for the same subject; the style of our article reflecting our opinion more than usually; finally, (in part as a justification), the pre-salt theme that has been analized in the previous 67 and 68 issues, is far more important for the country than the subjects we usually deal with.

The pre-salt is the synthesis of the close relationship between Economy and Energy that has motivated our publication and it is deemed by the e&e periodical of the utmost priority for a national discussion.

The signed opinion articles, following the periodical’s rule, express the particular opinion of the authors. In spite of the fact that the Editor is a co- author (the main part is due do José Fantine), this fact is valid more than ever in this article.

The article presents considerations about the national petroleum and gas sector considering the pre-salt discoveries. The texts are part of a series of articles about the theme that includes those presented in the Nos 67 and 68 issues of this periodicaldesta.

The first notion of these articles is that the pre-salt reserves should be used to allow national, entrepreneurial, technological and social growth in an integrated form. The high oil reserves show an unprecedented opportunity for progress for the country that could be frustrated by incorrect options as a result of hasty analyses that do not take into account a National Development Project.

The second notion is to amplify the debate of this issue, absolutely fundamental for the future of the country that should not be restricted to those few that are directly or indirectly commited to the important specific interests at stake. The authors, taking into account what has been informed, consider that the Government is conducting the issue contemplating its main aspects and they are concerned about the possibility of contributing for a helpful debate regarding the propositions to be presented so that the new oil Law can alway lead the oil and gas business in the national interes