Oil Multinationals Might Soon Have a Bigger Piece of Brazil’s Offshore Pie

    Protesters in Rio against privatizing the pre-salt - Tânia Rêgo/ABr

    Protesters in Rio against privatizing the pre-salt - Tânia Rêgo/ABr Brazil’s House of Representatives is ready to vote on whether to privatize the country’s offshore pre-salt assets, a move social organizations argue will put the country’s natural resources in foreign hands.

    The discussion of the matter, however, should be postponed till after the municipal elections, which are going to happen in October.

    Brazil’s current offshore oil exploration framework was designed by former President Luiz Inácio da Silva of the Workers’ Party and explicitly favors the state’s interests via state-run oil company Petrobras, to the disappointment of multinational oil companies.

    In 2010, a reform introduced by the Lula administration required Petrobras to be the sole operator in all pre-salt fields with a minimum 30 percent stake, restricting private investment.

    Protesters in Rio against privatizing the pre-salt - Tânia Rêgo/ABr

    But Brazil’s recently-installed Foreign Minister José Serra, who introduced Bill 4567/16 to the Senate, told foreign oil companies back in 2009 that the PT’s framework for offshore oil exploration could easily be reversed, according to WikiLeaks.

    Serra, who was then seeking the presidency, told Chevron that he would work to change the framework to suit the oil giant’s interests. Chevron had said they would refuse to even make a bid under the framework.

    “Let those guys [PT] do what they want. There will be no bid rounds, and then we will show everyone that the old model worked … And we will change it back,” Serra told Patricia Pradal, head of government relations for Chevron.

    With production increasing from approximately 41,000 barrels per day in 2010 to a million in mid-2016, Petrobras believes Brazil’s pre-salt discovery is one of the world’s most important in the past decade.

    It is believed that reserves of over 50 billion barrels could exist in the basin, nearly four times the current national reserves of roughly 14 billion barrels.

    Reforms

    Brazil’s Chief of Staff Eliseu Padilha said the government changed its strategy regarding its plans to carry out reforms this year. According to him, the government will focus its efforts on fiscal adjustment and the pension reform, “the two key topics”.

    Padilha said the federal government will not take further action on the proposed labor and political reforms. “We are not taking further steps now. The labor reform is moving ahead by itself, we don’t need to take any action. The Executive can stay away. The political reform is also going on its own,” he said.

    teleSUR/ABr

    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

    Eike Batista talks in the Brazilian senate about corruption at BNDES - Wilson Dias/ABr

    Once World’s Eighth Richest Man, Brazilian Gets 30 Years in Jail for Corruption

    A Brazilian businessman famous for amassing and then losing a multi-billion-dollar fortune has been ...

    Brazilian workers

    Brazil Not Only Out of Crisis, It’s Now Growing like China, Says Lula

    The president of Brazil, Luiz Inácio Lula da Silva said that Latin America's largest ...

    Wild Bunch

    A nationwide truckers’ strike that resulted in the blockade of several major highways throughout ...

    Brazilian industry

    Brazil Could Become Another Greece, Warns Planning Minister

    Brazilian acting minister of Planning, Development, and Management Dyogo Henrique indicated that public spending ...

    Brazilian worker

    Brazil Unions Call for General Strike in Answer to 12-Hour Work Day Proposal

    The new Brazilian government is proposing a law that would expand the working day ...

    Brazilian exports

    Brazil’s Growth Expected to Slow Down and Inflation Risks Are Up

    Brazilian  Central Bank’s latest weekly market survey, Focus, found that market forecasts for GDP ...

    Brazilian industry

    Brazil Grows 6% in First Half and Expects 5.5% Growth in 2008

    According to the latest release from the IBGE (Brazilian Institute of Geography and Statistics). ...

    Cattle being killed in Brazil

    Something Rotten in the State of Brazil: The Meat they Eat

      Meat producing giants JSB SA and BRF SA are among dozens of meatpackers ...