Brazil

Investment & Operational Criteria

Key Indicators

Risk Premia

3.125

%

Outlook

Negative

Rating

BBB|2S|-

Ranking

37

Reserves (1P)

Total

mm boe

Oil

86

%

Summary

Difficulty in maintaining confidence in the government continues to be the single largest drag on investment, and while large project justify the risks, the combination of risks to smaller companies and Outlook Negative remains a drain on valuations.

Updated

May 18, 2021

Country Basics

Region

Americas - South

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

BrazilBrazil

Eastern South America, bordering the Atlantic Ocean.

Outline

Tax Regime
Type

Multiple (PSC/Concession)

Tax Regime
Notes

The Brazilian fiscal regime that applies to the oil and gas industry consists of corporate income tax (CIT) and Government and third-party takes. Government and third-party takes vary depending on the type of contract.

Investment & 
Operational
Climate

President Bolsonaro took office on January 1, 2019, following the interim presidency by President Michel Temer, who had assumed office after the impeachment of former President Dilma Rousseff in August 2016. Temer’s administration pursued corrective macroeconomic policies to stabilize the economy, such as a landmark federal spending cap in December 2016 and a package of labour market reforms in 2017. President Bolsonaro’s economic team pledged to continue pushing reforms needed to help control costs of Brazil’s pension system, and has made that issue its top economic priority. Further reforms are also planned to simplify Brazil’s complex tax system. In addition to current economic difficulties, since 2014, Brazil’s anti-corruption oversight bodies have been investigating allegations of widespread corruption that have moved beyond state-owned energy firm Petrobras and a number of private construction companies to include companies in other economic sectors.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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