E&P Regulation in South America: The impact on Investment

摘要

This paper aims to discuss in what matters E&P regulation in South American countries can influence companies’ investment decision. In a recent past, enterprises were more willing to invest in countries which possess huge oil and/or gas reserves, even if they had to face high risks. In other words, areas with a great potential of increasing production provided the appropriate level of investment used to have more attractiveness. Nowadays, it seems that regulation issues (fiscal system, degree of government intervention, rules stability) are becoming more determinants to the investment decision, with investors looking for opportunities which involved less restrictions and high returns, although with a lower level of reserves. Current E&P regulation of South American countries are compared, as well as investment behavior, in order to identify what kind of rules is more effective in attracting new investments. Finally, Brazil’s attractiveness is evaluated.