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428 YEARBOOK OF THE OIL AND NATURAL GAS INDUSTRY IN ESPÍRITO SANTO 2022 CHAPTER 3 | ECONOMIC REFLECTIONS Schooling ES BR ES/BR % Illiterate 16 666 2.4 Up to 5th Incomplete 82 4,731 1.7 5th Complete Elementary School 78 4,751 1.6 6th to 9th Elementary School 324 13,312 2.4 Complete Elementary School 570 27,082 2.1 Incomplete High School 958 20,814 4.6 Complete High School 6,615 223,704 3.0 Incomplete Higher Education 366 20,231 1.8 Complete Higher Education 2,712 98,580 2.8 Master's Degree 224 4,269 5.2 Doctorate 24 707 3.4 Averagen Wage (R$) ES BR ES/BR% Average Wage 6.976,6 6.144,8 Source: Ministry of Labor and Social Security | Elaboration: Industry Observatory/Findes 3.2. Government Revenues Government participations are fi- nancial compensation paid by oil companies as consideration for the exploitation of a natural and finite resource. Government holdings can be divided between Royalties and Special Participation (SP). Royalties are a financial compen- sation calculated through the ap- plication of a rate provided for in the contract, ranging from 5% to 15%, on the billing of the produc- ing well. Special Participations are a financial compensation paid by oil companies that have fields with great productivity. That is, it is an extraordinary payment related to the level of production of an area. The calculation of the amount to be paid in SP occurs through the application of progressive rates on the net revenue from the quarterly production of each field. In Brazil, oil and natural gas pro- duction paid, in 2022, R$129.9 bil- lion in government shares, 67.0% higher than in the previous year. This compensation was intended for the Federal Government, the states and the municipalities. The composition of these payments in the country was: 45.5% in roy- alties; 45.3% in special partici- pations, 8.9% in signing bonuses and 0.3% in occupancy rate or area retention. In Espírito Santo, the total govern- ment shares were BRL 3.3 billion in 2022, 10.8% lower than in the previous year (chart 26). The ex- planation for this drop is due to the 34.6% decrease in oil production and 37.62% in natural gas produc- tion in Espírito Santo, in 2022. Of this total, BRL 1.6 billion was re- lated to the payment of Royalties and BRL 1.7 billion was related to the payment of Special Participa- tions. The state received the third highest collection of government shares among all states, behind Rio de Janeiro (BRL 49.5 billion) and São Paulo (BRL 5.9 billion). According to ANP projections, be- tween 2022 and 2027, government revenues from oil and gas explora- tion within the areas of influence of Espírito Santo are expected to record an average annual growth of 12.6%, reaching in 2027 a total collection of BRL 4.3 billion (chart 26). It is expected that the collec- tion of royalties will reach BRL 2.0 billion and the collection of Special Participations will reach BRL 2.3 billion in 2027. BRL 3.3 billion fwere paid for the production of oil and natural gas to Espírito Santo in government shares in 2022 Chart 26 - Revenue from government participations (royalties and SP) in Espírito Santo (BRL million) 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 الاسلااا Source: ANP | Elaboration: Industry Observatory/Findes Constant values - IPCA [National Extended Consumer Price Index] accum. Jan-Dec 2022 I Municipalities of ES Estate of ES I Municipalities projection IES State Projection 49 447
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