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Brazil's subsalt oil currently off limits to new entrants: Lula
RIO DE JANEIRO
Petroleumworld.com 11 14 07
Brazilian President Luiz Inacio Lula da Silva pledged Monday that his
government would not alter or cancel existing contracts held by private oil
companies in Brazil's offshore oil patch following Petrobras' massive
discovery of light oil and gas in the Tupi field, estimated at between 5
billion-8 billion barrels of oil equivalent.The President's comments came after officials hinted last week that the
new discovery would prompt the government to review how it handles hydrocarbon
concessions.But Lula also said Brazil won't allow new entrants to gain oil
concessions that might give them a piece of Brazil's subsalt oil play either."The [exploration and production] blocks that Brazil has already
auctioned in the past will continue with all contracts intact," Lula said on
his weekly radio show Breakfast with the President on Monday.Brazil won't be selling off blocks that are located in the offshore patch
where an 800 km by 200 km salt layer traverses much of the area where Brazil
now produces oil, in the Espirito Santo, Campos and Santos basins, Lula said.Brazil's government last week said it would remove 41 of the 312 blocks
it had planned to sell off in late November to the highest bidders, since
these blocks are located within the territory of Brazil's newest potential oil
province."We decided to stop selling all the blocks that are within this
800-km-long region," Lula said, without explaining if Brazil would consider
opening up this region for private participation at a later date.Lula's comments are the latest sign that Brazil is looking at reducing
the amount of access private companies are allowed to have to its offshore oil
patch, in light of new and massive discoveries of light oil and gas made in
the country's subsalt layer offshore, which Petrobras announced last week.Brazil's new oil fortunes raise the question of whether the country and
its state-controlled oil company Petrobras should allow new competitors to tap
into Brazil's subsalt oil region at all.Story from Platts 13 11 07
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