Brazil oil patch braces for decisive week
OREANDA-NEWS. Brazil's congress is expected to vote next week to dismantle state-controlled Petrobras' sub-salt mandate, a cornerstone of the deposed government's resource nationalist agenda.
The bill would allow firms other than Petrobras to operate sub-salt acreage, reversing a 2010 law that established the company?s controversial sub-salt mandate.
The change should help revive interest in Brazil's oil patch ahead of a planned sub-salt licensing round in first half 2017. Big oil companies with an established presence in the market, such as Shell, Chevron, Total, Norway's Statoil and Spanish-Chinese Repsol-Sinopec, are well-positioned to become sub-salt operators in Brazil.
The bill that would revoke Petrobras' mandate, known as the sole operator rule, was already approved by the Senate in February, and interim President Michel Temer has signaled his readiness to sign it.
Former vice president Temer temporarily replaced suspended President Dilma Rousseff in May while an impeachment trial against her proceeds in the Senate.
The Olympic Games that kick off today in Rio de Janeiro give a global stage to Brazilian protestors opposed to Temer and the pro-market changes he is seeking to implement, including oil reforms such as the sub-salt bill. Rather than unifying the country, the Olympics have laid bare the political upheaval that has persisted since Rousseff started her second four-year term in 2015.
Rousseff was dealt another blow yesterday when a Senate impeachment committee voted to accept a report that recommends her definitive ouster.
The final phase of the trial against Rousseff on allegations of fiscal wrongdoing is scheduled to wrap up in the 81-member Senate at the end of August. Rousseff denies the allegations and has spent the last two months trying to galvanize support.
But her efforts have been complicated by the indictment of her political mentor, former President Luiz In?cio Lula da Silva, known as Lula. On 29 July, Lula and six others were indicted by a federal court on obstruction of justice charges.
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