“The challenges surrounding the licensing of the Foz do Amazonas project have conveyed to the market the sense that the pace of bureaucracy does not always keep up with the pace of investment,” write Julia Borges da Mota and Thiago Bandeira.
Brazil has once again featured prominently on the global oil and gas radar. The combination of privileged geology, the scale of reserves, and a pre-salt operation that has become a global benchmark has put the country back in the race for the industry’s most sought-after capital. New discoveries reinforce this trend.
The Bumerangue discovery in the Santos Basin, classified by BP as its largest discovery in 25 years, rekindled the perception that there is still significant value hidden beneath Brazilian waters.
Alongside this, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) projects around BRL 609 billion in investments in the production phase through 2029—a level that places Brazil among the world’s largest upstream capex hubs and confirms foreign appetite for local assets.
The story, however, is not one of enthusiasm alone. Among international investors, the country still carries the label of excellent geology paired with uneven institutional strength.
Petrobras’s political weight and its ability to ripple effects across the entire value chain whenever it changes strategy, capex, or dividend policy remain factors closely scrutinized. Signs of interference or political reorientation raise the risk premium and affect perceptions of the sector as a whole.
Contractual and fiscal uncertainty also remains alive in the industry’s memory. Rule revisions, tax disputes, and midstream regulatory changes are seen as recurring ghosts, especially in long-term projects with extended payback periods. The sector’s negative reaction to recent proposals to increase charges shows that confidence is still fragile. It is not enough for a rule to be good—it must also appear durable.
Today, the most sensitive issue is administrative predictability. The Equatorial Margin has become an emblematic case. It is a geologically promising frontier, comparable to Guyana and Suriname, yet subject to a licensing process marked by denials, reassessments, political pressure, and technical back-and-forth.
The episode projected to the market the sense that the pace of bureaucracy does not always keep up with the pace of investment, and that decisions may fluctuate with the political climate.
It is not that Brazil is pushing capital away. It simply receives it with an embedded institutional discount.
On the regulatory front, the ANP continues to play a central role, with direct impact on corporate strategy. Its decisions shape drilling schedules, operating costs, exploratory commitments, development plans, and even the allocation of reserves in unitization cases. Changes to local content, royalties, or operational safety immediately reverberate through company portfolios, forcing firms to readjust priorities and recalibrate expectations.
The National Energy Policy Council (CNPE), in turn, expands the strategic reach of state decisions. The guidance to offer blocks beyond the 200-nautical-mile limit under the production-sharing regime opens a new exploratory frontier—and with it, new legal uncertainties. At the same time, the decarbonization agenda in upstream operations gains weight, altering technological requirements, financing models, and emissions targets.
Energy policy in Brazil is not merely background; it is part of the sector’s dynamics.
This mosaic involves other decisive actors. The Brazilian Institute of the Environment and Renewable Natural Resources (Ibama) and state environmental agencies effectively determine execution timelines through licensing. The Ministry of Finance and Congress influence structural profitability through taxes and fiscal changes. The Administrative Council for Economic Defense (Cade) affects M&A movements and integration strategies in gas and refining.
Each layer adds a degree of uncertainty or stability, and it is this final sum that investors assess.
In sector contracts, Brazil offers a core of predictability comparable to that of sound international jurisdictions. Concession, production-sharing, and unitization regimes rely on mature models, consolidated clauses, and arbitration provisions. The Superior Court of Justice (STJ) and the Federal Supreme Court (STF) recognize the validity of arbitration clauses and their use by the public administration in patrimonial disputes, strengthening confidence in enforcement. On paper, the institutional design is modern.
In practice, however, there is noise. Arbitration involving the state still faces challenges in sensitive public law matters, opening space for preliminary litigation that delays decisions. In environmental licensing, the multilateral complexity—encompassing Ibama, the Federal Public Prosecutor’s Office, states, and differing procedures—creates an ecosystem in which conflicts rarely find swift resolution.
The Equatorial Margin illustrates this clearly. More than a year of deadlock translated into real costs for exploratory projects.
In a global market where capital is mobile and disciplined, regulatory uncertainty weighs heavily. The International Energy Agency (IEA) shows that money flows to where the risk-return equation is clear, and in upstream operations, companies choose only a few priority destinations.
Brazil remains competitive. The pre-salt, with unmatched productivity and costs, continues to attract majors and enable final investment decisions. Still, the competitive edge can be eroded—not by lack of resources, but by institutional noise. This is what leads investors to prioritize the pre-salt and postpone higher-risk frontiers such as the Equatorial Margin.
Ultimately, Brazil’s dilemma is less about geology and more about predictability. The country offers sufficient legal certainty to sustain robust investment, but still falls short of jurisdictions considered first-tier in regulatory stability.
Foreign appetite exists, but it comes with caution and a demand for higher returns.
The opportunity is clear: align resource quality with predictability quality. When that happens, capital ceases to be opportunistic and becomes structural.
Julia Borges da Mota is a lawyer and founding partner at Murayama, Affonso Ferreira e Mota Advogados, specializing in the oil and gas sector.
Thiago Bandeira is an Intern at Murayama, Affonso Ferreira e Mota Advogados.
Fonte: Eixos
Foto: Divulgação Foresea
