Measuring the Economic Impact of Pre-Salt Layer on the Productivity of the Oil and Natural Gas Sector

Mario Jorge Cardoso de Mendonca, Amaro Olimpio Pereira Junior (), Jose Francisco Moreira Pessanha, Rodrigo Mendes Pereira and Julian David Hunt
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Mario Jorge Cardoso de Mendonca: Energy Planning Programme, Institute for Postgraduate Studies and Research in Engineering, Federal University of Rio de Janeiro, Rio de Janeiro 21941-909, Brazil
Amaro Olimpio Pereira Junior: Energy Planning Programme, Institute for Postgraduate Studies and Research in Engineering, Federal University of Rio de Janeiro, Rio de Janeiro 21941-909, Brazil
Jose Francisco Moreira Pessanha: Institute of Mathematics and Statistics, State University of Rio de Janeiro, Rio de Janeiro 20550-000, Brazil
Rodrigo Mendes Pereira: Institute of Applied Economic Research, Brasília 70076-900, Brazil
Julian David Hunt: Biological and Environmental Science and Engineering Division, King Abdullah University of Science and Technology, Thuwal 23955-6900, Saudi Arabia

Resources, 2025, vol. 14, issue 2, 1-18

Abstract: Based on productivity and efficiency indicators, we investigated the performance of the Brazilian oil and gas exploration industry, comparing the performance of this sector with other industrial sectors. We associate productivity with the concept of total factor productivity (TFP), while efficiency is measured using the stochastic frontier production model. Our sample was assembled from the Annual Industrial Survey (PIA) for 29 Brazilian industrial sectors from 2007 to 2019, period of data availability. The results derived from both methods allow us to affirm that the policies resulting from the Pre-Salt have significantly boosted the oil and natural gas extraction sector in terms of technological progress and efficiency. Between 2007 and 2009, the sector was among the least efficient, ranking 29th. However, in 2019 it reached first place in terms of efficiency. This structural change, which began in 2010 as a result of the technological innovations resulting from investments in R&D, has undergone a change since 2010, reflected in the upward trend towards pre-salt exploration promoted by Petrobras, in Rio de Janeiro, Brazil, as well as the new regulatory framework and government incentives for oil exploration in Brazil. Un-fortunately, these productivity gains have not been exported to other branches of industry connected to the oil industry.

Keywords: oil exploration industry; pre-salt; total factor productivity; stochastic production frontier; bayesian inference (search for similar items in EconPapers)
JEL-codes: Q1 Q2 Q3 Q4 Q5 (search for similar items in EconPapers)
Date: 2025
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