UPDATE 1-Brazil should pass law easing Petrobras subsalt rights this year -IBP

miércoles 28 de septiembre de 2016 12:05 GYT

(Adds Camargo comment, oil policy background)

By Luciano Costa

SAO PAULO, Sept 28 (Reuters) - A bill ending the requirement that Brazil's state-controlled oil company Petrobras lead all new projects in the country's Subsalt Polygon region should become law by the end of the year, the president of oil industry association IBP said on Wednesday.

Petroleo Brasileiro SA, as the company is formally known, has repeatedly said its debt and financial problems have made it impossible for it to take part in large new investments in the Polygon, an offshore region near Rio de Janeiro where several of the world's largest recent oil discoveries have been made.

If such changes are not passed there is a chance that oil rights auctions planned for next year could fail like other recent auctions, IBP President Jorge Camargo said at a conference in Sao Paulo.

"We can only know the degree of attractiveness, the participation of investors in the next auction," he said. "If there is no change, we will repeat the last auction, which was a disaster."

Brazil's Senate has passed a bill easing Petrobras' subsalt rights. It is expected to pass the country's lower legislative chamber sometime after two rounds of municipal elections slated to end on Oct. 30.

After a decade of regular auctions that opened up the country's oil sector to international investment and led to the discovery of Brazil's subsalt region in 2007 and 2008, the governments of Luiz Inacio Lula da Silva and his successor, Dilma Rousseff, moved to increase state control of the sector.

Auctions stopped for five years and Petrobras' was given increasing control of the best new areas.   Continuación...