Brazil’s senators to vote on oil laws which have hamstrung Petrobras

Brazil’s senators to vote on oil laws which have hamstrung Petrobras

Brazilian politicians could soon get the chance to vote on changing aspects of the nation’s oil law which have overburdened troubled state oil firm Petrobras with onerous offshore commitments, according to Reuters

The news agency cites Brazilian Senator Jose Serra saying a vote could be as near as next month on reducing local content rules which have obliged Petrobras to take a 30 percent stake in all new projects in the sub-salt polygon area.

Subsalt fields are oil prospects that lie far beneath a layer of mineral salts and this sub-salt polygon refers to a part of the Atlantic Ocean offshore Sao Paulo and Rio de Janeiro.

Scientists estimate the polygon to contain at least 176 billion barrels of oil and natural gas (barrels of oil equivalent, or boe).

Lifting the local content rules would free Petrobras, the world’s most indebted oil firm, from unnecessary commitments it cannot afford.

The company’s plight comes from being at the hub of a huge corruption scandal involving company executives, contractors and politicians. Its effects are being exacerbated by the steep fall in the price of oil.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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