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Informational rents in oil and gas concession auctions in Brazil

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  • Brasil, Eric Universo Rodrigues
  • Postali, Fernando Antonio Slaibe

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.

Suggested Citation

  • Brasil, Eric Universo Rodrigues & Postali, Fernando Antonio Slaibe, 2014. "Informational rents in oil and gas concession auctions in Brazil," Energy Economics, Elsevier, vol. 46(C), pages 93-101.
    • Handle: RePEc:eee:eneeco:v:46:y:2014:i:c:p:93-101
    DOI: 10.1016/j.eneco.2014.09.002
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    Cited by:

    1. Rafael Henrique Mainardes Ferreira & Claudia Tania Picinin, 2018. "Bibliometric analysis for characterization of oil production in Brazilian territory," Scientometrics, Springer;Akadémiai Kiadó, vol. 116(3), pages 1945-1974, September.

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    More about this item

    Keywords

    Oil and gas industry; Auctions; Regulation; Nonparametric estimation;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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