Examining the relationship between patent applications and financial positions in the upstream Oil and Gas Industry: evidence from Brazil

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Fábio de Oliveira Paula
Gabriel Marcuzzo do Canto Cavalheiro

Abstract

With the discovery of the Pre-Salt reserves, exploration of oil and gas is being strongly extended in Brazil, contributing to the recent increase of the demand for drilling capabilities. This paper discusses the impact of this oil discovery by assessing the relationship among the growth of proven reserves, the financial position of firms, and patent applications in the Brazilian upstream oil and gas industry. We provide empirical evidence indicating that firms with a lower financial performance prior to the pre-salt discovery were more aggressive in increasing the number of patent filings addressing technologies of the upstream oil and gas domain.

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