Bill Seeking To Ease Pre Salt Oil Fields Likely To Sail Through Upper House Of Brazilian Parliament
Move to ease the burden for state-run Petrobras to have full stake on pre salt oilfield development.
Brazilian oil major Petroleo Brasileiro Petrobras SA (NYSE:PBR) is likely to see its compulsive grip as the sole operator and stakeholder in the pre salt oilfields, once a bill that calls for its loosening grip passes through the upper house of the Brazilian parliament as laid out as planned by many senators of the country’s largest party.
The changes in the law would help the oil major to reduce its committed investments in potential oil fields, unless there is a social movement to stop it from happening. While resisted by the President Dilma Rousseff, her Energy Minister, Eduardo Braga, has said in an interview in Houston that it supports the notion that Petrobras will not make it mandatory for the oil and gas major to not commit itself to 30% of the pre salt oil projects or even operate them.
Petrobras does not have a bountiful amount of cash to cover for its development after racking up more than $125 billion in debt, and not putting it to use, following the corruption scandal that has rocked the company since last month.
Mr. Braga said that while the president has some reservations, she is listening to a lot of people and taking just about everything into consideration, though the tough challenge will be reconciling the public’s expectation, who are reeling through a slow economy and growing jobless rate, to keep in mind that money does not grow on trees. The decisions on projects have to be rational.
The bill is being sponsored by the Senator Jose Serra of the opposition PSDB party, which will probably sail through, but circumstances would not be the same when it is presented in the lower house. When most Brazilian legislators do not vote along party lines, it makes the outcome of the vote uncertain.
PMDB Senator, Ricardo Ferraco, says that he is confident about the passage of the bill because he has spoken to many senators, both friends and foes. He plans to put the bill to a fast track phase so that it does not have to go through many committees and is immediately put through vote. While most of Rousseff’s Worker’s party is against the bill, some will vote for it.
Petrobras stock price ended the day at $9.14, a gain of 0.22% from the previous day, following the expected approval of the bill passage. The future prospects of the company are yet to be determined although the piece of legislation was expected to be approved.
