Brazil to Change Rules to Get More Control of Oil Reserves

Brazilian oil Brazilian president Luiz Inácio Lula da Silva will present a bill aimed at increasing government control of offshore oil reserves to Congress in July before an annual legislative holiday. However the existing oil exploration rights which have been sold under the current auction system will not be changed with the new proposals.

Under the proposed new law, Brazil will divide oil output with companies that agree to develop blocks and give Brazil's government a share of production, Development Minister Paulo Bernardo said in an interview in Londrina, Brazil. The company that offers the biggest share of output at auction will win the right to develop the area.

Lula asked his top ministers to review the country's system of leasing oil exploration blocks to the highest bidder after the November 2007 announcement of Tupi, a 5 billion to 8 billion barrel offshore field that is the largest discovery in the Americas in three decades.

"We've already met with Lula and given him our proposals," said Bernardo, a member of the committee advising Lula on the bill. "He will present his bill to Congress before the recess."

Tupi is part of an offshore "pre-salt" area that may contain 100 million barrels according to Márcio Mello, president of Brazil's petroleum geologist's association. Congress is scheduled to go on recess July 17.

Lula has already reviewed the proposed legislation presented by a committee of ministers and the chief executive of state-controlled Petrobras, said Bernardo.

As part of the plan, the government will set up a new state-owned oil company to manage the government's stake in new oil developments, he said. The company will remain "skinny," staffed by a small number of technically oriented bureaucrats and won't operate oil fields, only manage the proceeds from fields the government owns.

Brazil also plans to require companies providing important oil equipment and services in the country to set up factories and local operations, Bernardo said.

"We want Brazil to become an exporter of oil equipment and services, not just an oil exporter," he said.

Existing oil exploration rights sold to companies such as Petrobras, BG Group Plc, Repsol YPF SA, Exxon Mobil Corp. and Galp Energia SGPS SA will be respected.

Mercopress

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil Frees 2,000 Slave Workers. Another 25,000 to Go.

One of the biggest challenges presently faced by organizations that fight against slave-like labor ...

Second Brazilian Mission Will Press London on Subway Killing

Brazil will send another mission to the United Kingdom to investigate the death of ...

Thank you, George, thank you!

Brazilian bestselling author thanks President Bush for uniting a fractioned world: "Thank you for ...

Brazil Increases Control in the Paraguay Border

The Brazilian Federal Revenue and Customs Secretariat intends to keep intense control in the ...

Brazil: Mercosur Parliament to Be Created in 2005

The agreement for the establishment of a Mercosur Parliament will be signed still this ...

Under New CEO, Santander Gets Full Control of Santander Brasil

Spanish banking giant Santander under its new executive chairperson, Ana Botin, announced earlier this ...

Argentina’s Leader Is Americas’ Most Popular. Brazil’s Lula Comes in 10th

Argentina's president Nestor Kirchner together with the presidents of Colombia Alvaro Uribe and Mexico's ...

LETTERS

The debate over affirmative action is encouraging. If nothing else, it forces people in ...

Slum Dunk

Refavela By Rodolfo Espinoza As far as anniversaries go, although this one is a ...