Brazil Puts Pension Use in Oil Bill Up for Vote

SAO PAULO (Dow Jones), Mar. 4, 2010

Brazil's lower house Thursday is expected to vote on an amendment that would allow existing local shareholders in state-controlled oil company Petroleo Brasileiro, or Petrobras to use 30% or more of their government pension funds to buy further shares as part of a company capitalization plan.

The government is opposed to the addition to the capitalization bill, which is aimed at providing the oil company with funds for the exploration of potentially massive reserves in subsalt oil fields. But the government may not be able to vote down the amendment, admitted Candido Vaccarezza, leader of the government in the lower house.

Supporters of the amendment argue that it will allow normal Brazilians to participate in the process.

The bill is one of four key pieces of legislation crafted by the government to reform oil-sector rules and expedite production in the wake of the discovery of the subsalt oil in late 2007.

The bill must still receive approval from Brazil's Senate in a vote expected for later this year.

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