Page 12 - LatAmOil Week 33 2021

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Brazil may use oil royalties to fund free LPG
THE Brazilian government may use royalty payments from the oil industry to subsidise free LPG supplies for impoverished families, accord- ing to a Reuters report.
Energy and Mining Minister Bento Albu- querque told the news agency last week that the administration of President Jair Bolsonaro might launch the $1.42bn subsidy programme next month. He explained that Brazilian author- ities were considering this move in the hope of encouraging consumers to cut electricity con- sumption voluntarily, thereby reducing the risk of power shortages.
“For the year 2022, approximately BRL7.5bn [$1.42bn] will be needed to supply a gas cylin- der to Bolsa Familia families every two months,” Albuquerque was cited as saying. He was refer- ring to Brazil’s federal social welfare programme.
It is not yet clear whether the government can use royalties to cover social welfare programmes without congressional approval, Reuters noted. However, the Bolsonaro administration is keen to start distributing LPG cylinders as soon as possible, ahead of the elections scheduled for next year.
The president’s approval ratings have been sinking and are now at historic lows. They could drop even further if widespread power supply
PERU
shortages materialise. Brazil’s hydroelectric power plants (HPPs) are currently operating below capacity because the country is experi- encing its worst drought in more than 90 years.
Even so, Alburquerque said last week that Brazil was not in danger of having to resort to power rationing. He also said that the national oil company (NOC) Petrobras would not have to cover the cost of the proposed LPG subsidies and tried to reassure investors that the state- owned firm was not being used to serve the cur- rent government’s political purposes, as it has been made to do before.
Brazil produced an average of 2.94mn barrels per day (bpd) of oil in 2020, up by 5.5% on 2019, when output reached an average of 2.8mn bpd, according to data from the country’s oil and gas regulator, the National Agency of Petroleum, Natural Gas and Biofuels (ANP). ™
(File Photo)
Minister comments on plans for PetroPerú
PERU’S new government, headed by President Pedro Castillo, has continued to reveal more information about its plans for raising the profile of the national oil company (NOC) PetroPerú.
In an interview with Argus Media published earlier this week, Energy Minister Ivan Merino said that the Castillo administration’s goal was to make the company stronger and more efficient. To this end, Lima will restructure the company to eliminate its “many limitations” and make it more agile, more transparent and more effec- tively and efficiently managed, he said.
“We have to fix it first if we are going to improve it,” he commented.
The repair work will not include privatisa- tion, he emphasised. “We believe in public com- panies, and many of the major oil companies in the world are public,” he declared. “We want public companies that generate revenue for the state, not employment for the party in power.”
Merino did not say exactly what restruc- turing might involve, but he stated that Peru’s
Energy Minister was trying to identify its prior- ities. “We are in the process of gathering infor- mation to make informed decisions on our next steps,” he commented. “We need to evaluate our financial and human resources. We want PetroPerú to be a large, strong company, but we need to have our priorities straight. We need to look at profitability sector by sector, including the [Talara] refinery, Northern Oil Pipeline [ONP], production blocks and other divisions. This is what a private company would do.”
The energy minister also stressed that Peru’s long-term goal should be to eliminate consump- tion of fossil fuels. The country has the resources to plan for a shift to renewable energy, he said.
“We have to stop using gas for power. This is obvious,” he told Argus Media. “We need to be more aggressive with renewables. We have solar capacity in the south of the country, and along the coast there is wind. Studies have shown that the southern highlands have strong geothermal potential.” ™
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w w w . N E W S B A S E . c o m Week 33 19•August•2021