Thursday, October 06, 2016

Brazil Opens Oil Fields to Foreign Firms in Major Policy Shift

Brazil’s Congress voted on Wednesday night to open up its pre-salt oil fields to foreign investors by scrapping Petroleo Brasileiro SA’s obligation to be the area’s sole operator.

The legislation was approved by a 292-to-101 vote, following a bad-tempered debate during which opponents, many dressed in the orange jumpsuits of the state-controlled oil company, repeatedly attempted to delay proceedings. Various amendments to the legislation will be debated next week before President Michel Temer signs it into law.

In a significant change to Brazil’s offshore oil industry regulations, companies other than Petrobras can now operate blocks in the largest deep-water deposits discovered this century.

“The change will allow new investments,” Itau Unibanco Holding SA analysts Diego Mendes and Andre Hachem said in a research report ....