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Download (2973Kb) University of Warwick institutional repository: http://go.warwick.ac.uk/wrap A Thesis Submitted for the Degree of PhD at the University of Warwick http://go.warwick.ac.uk/wrap/77710 This thesis is made available online and is protected by original copyright. Please scroll down to view the document itself. Please refer to the repository record for this item for information to help you to cite it. Our policy information is available from the repository home page. Regulatory Governance in the Brazilian Oil Sector: Passport to the Future or Passage to the Past? Pedro de Abreu e Lima Florencio A thesis submitted to the School of Law, university of Warwick in fulfilment of the requirements for the award of the degree of Doctor of Philosophy School of Law, University of Warwick, July 2015 CONTENTS List of Figures ........................................................................................................................... iv Glossary of Terms and Abbreviations .....................................................................................v Acknowledgements ................................................................................................................ vii Declaration ............................................................................................................................. viii Abstract .................................................................................................................................... ix Part I - Legal and Theoretical Foundations for the Analysis ................................................ 1 1 - Introduction .................................................................................................................... 1 1.2 Relevance of the Research ........................................................................................ 6 1.3 Methodological Considerations ................................................................................ 8 1.4 Organisation of the Thesis ...................................................................................... 11 2 The Evolution of Institutions of the Brazilian Oil Sector .......................................... 14 – 2.1 Origins of the Oil Industry and Formation of its Institutions ............................... 14 2.2 The 2010 Reform in the Brazilian Oil Sector ......................................................... 25 2.3 Conclusion ................................................................................................................ 40 3 - Regulation Theory and applications to the Brazilian Oil Sector ............................... 42 3.1 Interest Theories ..................................................................................................... 43 3.2 Institutional Theories .............................................................................................. 47 3.3 Interest Theories and Institutional Theories in Brazil ......................................... 51 3.4 Reflexive and Responsive Theories ........................................................................ 55 3.5 Conclusion ................................................................................................................ 62 4 - International experiments in oil sector regulation .................................................... 65 4.1 Institutional Design ................................................................................................. 66 ii 4.2 The Case of Norway ................................................................................................. 76 4.3 Conclusion ................................................................................................................ 88 Part II Regulatory Governance in Brazil and its Effects ................................................... 92 – 5 Strategic Control of Oil ................................................................................................ 95 – 5.1 Greater control over the production process ........................................................ 96 5.2 Greater appropriation of wealth coming from the exploration of oil activities 118 5.3 greater strategic control of oil: what for? ............................................................ 123 5.4 Conclusion .............................................................................................................. 125 6 - Investments ................................................................................................................. 127 6.1 Investments in the oil sector ................................................................................. 129 6.2 Governance Mechanisms in the Brazilian Oil Sector .......................................... 138 ....................................................................... 172 . Petrobras Operational Exclusivity 6.4 Positive Aspects of the 2010 Reform in terms of Investment ............................ 181 6.5 Conclusion .............................................................................................................. 186 7 - Production ................................................................................................................... 190 7.1 Production in the oil sector ................................................................................... 191 ....................................................................... 194 . Petrobras Operational Exclusivity 7.3 Local Content Policies in the oil industry ............................................................ 198 ........................... 212 . Petrobras monopolistic condition and its production effects 7.5 Pricing policies and their effects on production ................................................. 215 7.6 Conclusion .............................................................................................................. 217 8 Technology and Innovation ...................................................................................... 219 – 8.1 Technology and Innovation in the Oil Sector ...................................................... 220 iii 8.2 Operational exclusivity .......................................................................................... 235 8.3 Governance structure of the operational committee .......................................... 239 8.4 Local Content Policies............................................................................................ 240 8.5 Financial resources ................................................................................................ 243 8.6 Conclusion .............................................................................................................. 245 Part III Towards a Better Governance Setting ................................................................ 248 – 9 Proposals .................................................................................................................... 249 – 9.1 Abolition of the Operational Exclusivity .............................................................. 250 ................................................................................................. 252 . PPSAs dissolution 9.3 Change in Local Content Regulations in the OIl Sector ....................................... 254 9.4 Modifications in Petrobras .................................................................................... 260 9.5 Other specific proposals ........................................................................................ 263 9.6 Conclusion .............................................................................................................. 264 10 Conclusion ................................................................................................................ 266 – Bibliography ......................................................................................................................... 277 Appendix ............................................................................................................................... 302 Regulatory Regimes for Exploration and Production of Oil ......................................... 302 1. Concession Regimes ................................................................................................. 304 2. Production Sharing Regimes (PSR) ........................................................................ 305 3 Joint Venture Regimes (JV) ...................................................................................... 306 4 Services Regimes ...................................................................................................... 306 5 Comparisons Between Oil Exploration Regimes .................................................... 307 Annex I: List of Interviewees .............................................................................................. 311 iv LIST OF FIGURES Figure 1:Institutional Model in the Oil Sector (page 137). Figure 2: Interdependency of Studied Variables (page 192). Figure 3: Technological Dimensions of Supplied Services and Equipment to Petrobras (page 233). v GLOSSARY OF TERMS AND ABBREVIATIONS ANEEL: Agencia Nacional de Energia Eletrica Brazilian National Electricity Power Agency. – ANP: Agencia Nacional do Petroleo - Brazilian National Petroleum Agency. BNDES: Banco Nacional de Desenvolvimento Economico e Social Brazilian Bank for National Economic and Social Development. – CAPEX: Capital Expenditures. CIA: Central Intelligence Agency CNOOC: Chinese National Offshore
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