Brazilian president Michel Temer signed legislation on Tuesday which opens the way for oil companies other than state-controlled Petrobras to operate the coveted sub-salt acreage. The bill repeals a controversial 2010 rule that requires Petrobras to hold a minimum 30% operating stake in assets governed by production-sharing contracts, mainly sub-salt assets.
Fruitful dialogue is what allows us, today, to sanction this project that reactivates the oil and gas sector, Temer said at the signing ceremony in Brasilia. Oil industry executives have long blamed the sole-operator rule for slowing down sub-salt development.
The new law still gives Petrobras the right of first refusal for areas considered strategic, without defining a reserves floor, under certain conditions. But Petrobras has signaled its reluctance to take on the operator role for new sub-salt projects, and could end up selling stakes in legacy sub-salt projects as part of a wider divestiture campaign.
Executives from major oil companies such as Shell, the country's largest private-sector producer, attended Tuesday's ceremony.
The law is one of several key industry reforms that are rekindling the interest of foreign oil companies ahead of a string of licensing rounds scheduled for next year.
Only one sub-salt project was subject to the sole-operator provision, the 8bn-12bn bl Libra field that was awarded to a Petrobras-led consortium in 2013. Petrobras holds a 40% operating stake in Libra, Shell and Total each hold 20%, and Chinese state-owned firms CNPC and CNOOC each hold 10%.
The first test of the new legal framework is a sub-salt licensing round planned for the second half of 2017.
The success of that round, covering four sub-salt unitization areas, Carcara, Gato do Mato, Tartaruga Verde and Sapinhoa, still hinges on the publication of new unitization rules which national energy council CNPE is expected to release next month.
Last week, Norway's Statoil completed its US$2.5bn acquisition from Petrobras of the BM-S-8 block, where Carcara is located. The deal positions the firm to expand its operations. Shell already operates Gato do Mato. Both areas are currently governed by concession contracts that preceded the production-sharing model.
The sole-operator provision was an expression of the resource nationalism that shaped Brazilian oil policy following the discovery of massive offshore reserves a decade ago, during the presidency of Lula da Silva.
The economy has since fallen into a deep recession and many politicians, including Temer himself, who took over from impeached president Dilma Rousseff in August 2016, are fending off corruption scandals.