Brazil Unveils Presalt Oil Laws

3 September 2009 (Last Updated September 3rd, 2009 18:30)

Brazilian President Luiz Inacio Lula da Silva has proposed new legislation to govern the development of the country’s potentially enormous reserves of oil in the offshore presalt layer. Lula has described the oil fields, which lie about 270km offshore Brazil, as a “gift from god” that is

Brazilian President Luiz Inacio Lula da Silva has proposed new legislation to govern the development of the country’s potentially enormous reserves of oil in the offshore presalt layer.

Lula has described the oil fields, which lie about 270km offshore Brazil, as a “gift from god” that is expected to boost the economy of the country significantly.

The development model, which must be ratified by Brazil’s Congress, includes a new production-sharing system for contracts, a public company for presalt contract agreement and a social fund for investment in education and mitigating poverty in Brazil.

The new model also includes the creation of a public company responsible for controlling and monitoring the cost of presalt E'P and the administration of sharing contracts.

Brazil’s Minister of Mines and Energy Edison Lobao said the proposed production-sharing system reflects a change in Brazil’s position towards becoming a self-sufficient global energy producer.