Brazil congress makes Petrobras sole pre-salt operator

Maria Luiza Rabello and Peter Millard – Bloomberg, 12/02/2010

Brazil’s lower house of Congress approved new oil regulations that will increase government control over the energy industry and reduce competition against Petroleo Brasileiro SA, the state-controlled producer.

The regulations approved yesterday allow Petrobras, as the company is known, to be sole operator of oil fields where licenses haven’t yet been auctioned. The oil producer will be able to explore every field in areas designated “strategic.” The bill needs the president’s signature.

Brazil is tightening the state’s grip on the domestic oil industry after the discovery of the Tupi and Libra fields, which may hold as much as 8 billion barrels of oil and 15 billion barrels, respectively.

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