Petrobras' Subsalt Role No Worry for OGX

RIO DE JANEIRO (Dow Jones Newswires), Jul. 24, 2009

The possibility of state-run oil giant Petrobras being appointed the only approved operator in Brazil's subsalt oil fields does not worry Brazilian oil and gas company OGX, the local Estado news agency reported Friday.

Brazil's government is currently considering proposals for a new regulatory framework to govern the massive offshore oil fields.

The possibility of Petrobras serving as the only operator in the subsalt area is one of the proposals being considering for the new framework, which is expected to be sent to Congress soon.

If approved, such a proposal would prevent OGX and other independent oil companies from operating in the highly lucrative subsalt area, which has estimated reserves of between five billion and eight billion barrels of oil.

"If the government makes rules, we will simply obey them," OGX's owner Eike Batista told Estado without showing any concern.

"It's not for me to decide. I'm not a legislator, I just follow the rules," he added.

Batista is Brazil's richest man and owns mining and port assets.

In May, OGX reported it had cash-in-hand of BRL7.8 billion ($4.11 billion) to develop its oil and gas projects.

OGX currently operates nine exploratory blocs in the Campos and Santos Basins, located off the coast of southeast Brazil.

Overall, OGX has the exploration rights in 22 high-potential Brazilian offshore blocs for a four-year exploratory campaign.

OGX has said it expects to start producing oil by 2011.  

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