MercoPress. South Atlantic News Agency

Brazil congress limiting Petrobras monopoly over subsalt oil resources

Brazil hopes the rules changes will attract foreign oil companies with resources that the scandal-plagued, debt-ridden Petrobras does not have.

Brazil's lower chamber of Congress approved this week the main points of a bill removing a requirement that state-led oil company Petrobras be the sole operator of vast offshore oil reserves in the costly subsalt layer with a minimum 30% stake in their development.

 The bill, which could be amended in the future, is aimed at boosting private investment in Brazil's oil industry, though Petrobras retains the first option to develop promising fields.

The legislation has already been approved by the Senate and passed the lower house 292-101.

Brazil hopes the rules changes will attract foreign oil companies with resources that the scandal-plagued, debt-ridden Petrobras does not have.

The bill, which overturns parts of a 2010 law seeking to increase government control of new offshore oil and gas resources, is part of President Michel Temer's strategy to revive Brazil's economy by reducing state intervention and encouraging private entrepreneurs to take up the slack.

Temer, who replaced populist Dilma Rousseff after she was impeached in August for breaking fiscal rules, has promised to adopt more business-friendly policies to pull the economy out of its worst recession since the 1930s.

His government last month unveiled a new concession program to increase private participation in airports, roads and ports as well as in the oil and gas sectors.

The 2010 production-sharing law was criticized for limiting foreign investment in the so-called Subsalt Polygon, a region off Brazil's coast near Rio de Janeiro where large oil deposits lie far beneath the seabed under a layer of mineral salt.