Senators of Brazil’s largest party expect the upper house to approve a bill that relieves state-controlled Petrobras of its role as sole operator and compulsory stakeholder in so-called pre-salt oilfields.
“I don’t see any difficulty for this project to be approved in the Senate,” Eunicio Oliveira, leader of the PMDB, said in a telephone interview from Brasilia this week. “It’s an important project for the country and would aid Petrobras.”
Changes would help the most indebted oil company in the world by reducing necessary investments in future oil rounds, said PMDB Senator Ricardo Ferraco, the sponsor of the bill. Humberto Costa, Senate leader of President Dilma Rousseff’s Workers’ Party, said only a widespread social movement could stop the bill from being approved.
While Rousseff herself is resisting deregulation, her Energy Minister Eduardo Braga said in a recent interview in Houston that he supports allowing Petroleo Brasileiro SA, as the company is formally known, to opt out of the obligation to assume at least 30% ownership of all pre-salt projects and operate them. The company lacks the money to cover its share of development after racking up $125 billion in debt.
“The president has strong convictions, but she is listening to a lot of people,” Braga said at the time.
The presidency didn’t respond to an e-mail seeking comment.
Fast-Track Plan
The bill, authored by Senator Jose Serra of the opposition PSDB party, would still have to be approved by the lower house. Brazilian legislators often don’t vote along party lines, making the outcome unpredictable.
Ferraco said he has spoken to fellow congressmen and is certain of the majority of votes. He plans to place the bill on a fast-track that would put it to a vote on the floor without going through committees.
While most members of the Workers’ Party oppose the bill, some will vote for it, said Costa.
“We will have to rally our constituency against it because there are strong lobbies behind the push to change the rules,” Costa said.
In another measure to try to accelerate development of vast offshore reserves, Brazil’s oil regulator plans to ease future fines for producers who fail to meet strict local-content guidelines.
The first set of changes since the policy started more than a decade ago probably will be ready for the next oil license auction set for October, Helder Queiroz, a director at the National Petroleum Agency, said in an interview last week.
Recommended Reading
Chesapeake Stockpiles DUCs as Doubts Creep in Over Southwestern Deal
2024-05-02 - Chesapeake Energy is stockpiling DUCs until demand returns through growth from LNG exports, power generation and industrial activity.
It’s Complicated: E&Ps Find Some Financial Tailwinds, But It’s Not All Smooth Sailing
2024-05-03 - Relatively stable WTI prices in the $80s/bbl provide some breathing room as companies allocate cash for operations, and pragmatism is seeping into the energy transition movement.
WTI Delivered to East Houston Hits Highest Premium in Nearly Three Years
2024-05-01 - Oil takeaway capacity from the Permian Basin will tighten next month due to scheduled pipeline maintenance.
CPS Closes $785MM Deal for Talen Energy’s Texas NatGas Plants
2024-05-01 - CPS Energy has acquired all assets associated with the 897-MW Barney Davis and 635-MW Nueces Bay natural gas plants in Corpus Christi, Texas, and the 178-MW natural gas plant in Laredo, Texas.
Chesapeake Enters into Long-term LNG Offtake Agreement
2024-02-13 - Chesapeake Energy entered into a long-term liquefaction offtake sale and purchase agreement with Delfin LNG and Gunvor Group for a 20-year period.