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Informational rents in oil and gas concession auctions in Brazil

Eric Universo Rodrigues Brasil and Fernando Antonio Slaibe Postali

Energy Economics, 2014, vol. 46, issue C, 93-101

Abstract: This article aims to estimate the informational rents earned by winning bidders in oil and gas exploration and production auctions in Brazil. We estimate the distributions of bids and bidders' private valuations using a nonparametric structural model and assuming independence and asymmetry between participants. Petrobras, the Brazilian state-owned petroleum giant and former oil sector monopolist, was considered a competitor that was distinct from other competitors. Thus, we investigate a database based on information from all auctions held between 1999 and 2008. The results suggest that Petrobras earned significantly higher information rents than other competitors. Such rents ranged from 15% to 63%, depending on the number and type of competitors.

Keywords: Oil and gas industry; Auctions; Regulation; Nonparametric estimation (search for similar items in EconPapers)
JEL-codes: C14 D44 D82 L71 Q38 (search for similar items in EconPapers)
Date: 2014
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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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