|
 The Brazilian government has unveiled plans to bring more state control to its oil industry and take advantage of offshore reserves. The president of Brazil, Luiz Inácio Lula da Silva, proposed Monday, August 1st, switching to a system which would see the government own a part of all oil produced by changing concessions for production-sharing agreements.
Under the current concessions system companies bid to win the rights to explore for oil in blocks. With the new system when oil prices soar, most of the windfall earnings would be for the government.
Lula said the rules, which took 14 months to draft, if approved by congress, would see a "new Independence Day" for Brazil, helping tackle poverty and fund education and technological development.
It is believed Brazil's recently discovered sub-salt reservoirs of oil could see it become a producer and exporter nation rivaling some OPEC countries such as Venezuela within a decade.
However the sub-salt discoveries lie under more than 2,000 meters of water and a further 5,000 meters of sand, rock and a shifting layer of salt, which is not cheap to extract.
In 2007, government managed Petrobras, shocked the world with the announcement of the Tupi discovery, the Western Hemisphere's largest oil find in more than 30 years.
The Lula administration then withdrew exploration and production blocks from planned concession auctions.
Government managed oil firm Petrobras said it would be the sole operator of the new sub-salt fields and would have a minimum 30% stake in consortiums set up to drill for the oil in the fields, which are estimated to contain 50 billion barrels of oil.
Brazil is currently self-sufficient in oil, producing enough to meet consumption needs.
President Lula will present his plan to congress later, saying he wants to use income from the oil to tackle poverty and propel Brazil to developed status.
Brazil's discovery of new reserves was "a passport to the future" if handled properly, he said. "We don't have the right to take the money we're going to get with this oil and waste it," he said in his weekly radio address.
"What we want... is to use this oil to make Brazil a wealthier country, to make it more developed."
However part of the task is to ensure that the government secures a bigger share of the profits without alienating foreign companies who could play an important part in extracting this oil and gas.
The Brazilian government says the state-controlled oil company Petrobras is a globally respected partner and that its new profit sharing model still offers excellent investment opportunities.
A new state-owned company, Petrosal will be created to manage the government's precious assets. Petrosal could eventually overshadow Petrobras, according to some analysts.
Petrobras
 |
Subscribe to this comment's feed
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.