Brazil's ANP to Announce New Oil Law Proposal in Early 2009

RIO DE JANEIRO (Dow Jones Newswires), Apr. 7, 2009

A new regulatory regime covering Brazil's recently discovered offshore oil reserves should be ready in the first half of 2009, the president of the country's National Petroleum Agency said Tuesday.

Quoted by the local Estado news agency, ANP President Haroldo Lima said that "it was very likely" that the new regulations would be announced in the first half of the year.

A government panel studying the possible changes to Brazil's oil laws was originally expected to complete its work in October. The proposals require in-depth study, Lima said, because they will cover the as-yet-unknown oil riches that Brazil possesses.

Lima also said that the ANP expects to hold an 11th round auction of exploration and concession blocks this year, adding that he expected some offshore blocks to be included.

"But its clear that these areas will not include the sub-salt region," Lima said, adding that it would be unlikely that remaining sub-salt areas not under concession would ever be auctioned off.

About 41% of the sub-salt area has been auctioned off in concessions, with the rest remaining in government hands, Lima said.

President Luiz Inacio Lula da Silva charged the interministerial panel with finding ways to maximize the government's take of recently discovered sub-salt oil reserves. Lula has pledged to use proceeds from the sub-salt oil deposits to diminish the country's crushing poverty and improve the educational system.

According to Lima, conservative estimates put sub-salt reserves at about 50 billion barrels of oil equivalent, or BOE.

"These estimates and the more than 14 billion barrels [of reserves] that we already have should elevate Brazil to fourth place in terms of the largest global reserves in a very short time," Lima said.  

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