Petrobras CEO Says Pre-Salt Sharing Model is Constitutional

Petrobras' CEO, José Sergio Gabrielli de Azevedo, said Tuesday during a public hearing held at the House of Representatives, that there is no legal hurdle that could stand in the way of the approval of the bill that is currently under analysis at the Congress and establishes both the production sharing model and Petrobras as the sole operator for the pre-salt.

"There is no chance it is unconstitutional," he said, mentioning article 177, that allows the Union to hire state-owned or private companies. The debate was organized by the special commission that analyzes the creation of the oil and gas production sharing system for the pre-salt.

According to Gabrielli, changes that took place in the domestic and international scenarios justify the changes made to the regulatory model.

"The situation is completely unlike what it was in 1997," he said, referring to the exploratory risk, which was bigger than the pre-salt's, and the need there was to attract capital in those days.

As an example of the low risk in the pre-salt, the executive emphasized Petrobras found evidence of hydrocarbons in all 13 wells it drilled in the Santos Basin and that it was successful in 41 of the 47 wells it drilled in the Espírito Santo and Campos Basins, 13 of which reached the pre-salt. "This is fourfold the world's average exploratory success," he emphasized.

Responding to representative Henrique Eduardo Alves (PMDB-RN), Petrobras' CEO highlighted the Company's advantages as the sole operator for the pre-salt, a fact that would increase the efficiency and reduce the exploratory costs.