Banca de DEFESA: Edson Junior Moura Santos

Oil rents and development: a municipal analysis

Oil and gas industry; royalties; regional development.

The Oil and Gas industry has an important role in the economic and social relations of the
contemporary world. The availability of these resources to cities, states, countries and
municipalities can generate something that goes beyond simple industrial development in a
specific niche. The productive activities of O&G have a wide productive chain, and, in
addition, generate oil revenues, popularly known as royalties, which, when appropriately
used, can be an engine that generates development. Brazil has large oil reserves, especially
after the Pré-Sal discovery. The state of Rio de Janeiro, in particular, has the privilege of
having a large part of these on its coast, which consequently generates oil income in large
volumes. This research approaches the development of the Oil and Gas industry in the state of
Rio de Janeiro and the influences that the receipt of oil revenues, royalties and special
participations, can cause in the socioeconomic development of its municipalities, in the period
from 2008 to 2016. The purpose was to verify the role of oil revenues in the composition and
evolution of the FIRJAN Municipal Development Index of each city in Rio de Janeiro, with
special attention to the top three that received the most such revenues in 2016: Carapebus,
Maricá and Niterói. In addition to the historical and statistical approach, an empirical
temporal analysis of the effects of these incomes on the socioeconomic development of the
municipalities was sought, using a regression model with panel-structured data, with the
FIRJAN Index of Municipal Development being the dependent variable and oil revenues as
an independent variable. Also, the same model was used to observe the decomposition of the
index, creating analyzes in the areas of Employment and Income, Education and Health. As a
result, positive relationships were found between the receipt of oil revenues and the
development of municipalities in the state of Rio de Janeiro in a general context. For the cities
of Carapebus, Maricá and Niterói, no conclusive answers were found, and thus, no evidence
of positive or negative relationships between such incomes and the progress of these
municipalities.