Asymmetric Information in Oil and Gas Lease Auctions with a National Company

Matoso, Rafael; Rezende, Marcelo

doi:10.2139/ssrn.1868976

Cited by 2 publications

(1 citation statement)

References 23 publications

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“…Brasil and Postali (2014) argue in favour of this hypothesis by estimating that Petrobras has higher informational rents, although in a setting that assumes independent private values (IPV). Matoso and Rezende (2014) further explore this hypothesis in a mineral-model rights setting, following Hendricks and Porter (1988) procedure and concluding that indeed Petrobras seems to be the most informed bidder.…”

Section: Introductionmentioning

confidence: 97%

Local Content in Brazilian Oil and Gas Auctions

MITTELSTADT¹

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In this paper, we study the case of Brazilian oil and gas auctions to assess the impact of local content requirements in bidding behavior, allowing us to estimate its impact on government revenue. The Brazilian case is particularly appealing, as there were significant changes in these requirements throughout the years. In the sales with increased local content requirements there was a dramatic change in the bidders behavior: the average signing bonus for offshore tracts dropped from an average of R$ 57 million in the first sales to only R$ 10.6 million and the average number of bids per tract plunged from 0.92 to 0.12. We aim to answer how much the increased local content requirements affected participation and revenue in the auctions. We develop and estimate a structural auction model within the mineral rights framework that includes an entry decision and bids in multiple dimensions, including a bonus and a local content percentage. Our results show that local content requirements increase costs in deep water areas in 14%. Government revenue in auctions in these areas could be much larger in a counterfactual with no local content requirements, amounting to an extra R$ 17 billion in signing bonus only for deep-water tracts. For onshore areas, we did not find any significant difference between local and foreign costs.

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Section: Introductionmentioning

confidence: 97%

Local Content in Brazilian Oil and Gas Auctions

MITTELSTADT¹

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Determinantes do lance vencedor em leilões de petróleo e gás: avaliando o caso brasileiro

Moura¹,

Canêdo-Pinheiro²,

Daitx³

2012

Rev. Bras. Econ.

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Este artigo usa a metodologia de Rezende (2008) parainvestigar os determinantes do lance vencedor em leilões de bloco de petróleo e gás no Brasil. Há indicação de que os efeitos da "maldição do vencedor"de fato se manifestam nas estratégias adotadas pelas empresas nesses leilões. Também são encontradas evidências de que a presença da Petrobras tem efeito positivo no valor dos lances ofertados. Além disso, consórcios entre empresas aparentemente não têm motivaçã o anticompetitiva. Por fim, não há indícios da existência de sinergias entre os blocos. Desse modo, embora haja espaço para melhora no desenho das licitações promovidas no Brasil, o desempenho dos leilões selados de primeiro preço (sem a possibilidade de lances por pacotes de blocos) não tende a ser muito inferior às alternativas possíveis. This paper follows Rezende (2008) to investigate the determinants of bidding strategy in the Brazilian oil and gas auctions. The results indicatethat strategies adopted by participants are affected by the "winner's curse". We also found evidence that the presence of Petrobras has a positive effect * Agradecemos à Adriana Hernandez-Perez e ao Allan Vasconcellos que foram os responsáveis por uma versão preliminar da base de dados utilizada; aos participantes do 39 o Encontro Nacional de Economia (Anpec), do V Encontro de Políticas Públicas e Crescimento Econômico CAEN-EPGE, do Seminário do IBRE e a dois pareceristas anônimos por seus comentários e sugestões. Qualquer erro eventual é nossa responsabilidade.

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Asymmetric Information in Oil and Gas Lease Auctions with a National Company

Cited by 2 publications

References 23 publications

Local Content in Brazilian Oil and Gas Auctions

Local Content in Brazilian Oil and Gas Auctions

Determinantes do lance vencedor em leilões de petróleo e gás: avaliando o caso brasileiro

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