BRAZIL: Transfer Of Rights Renegotiation With Petrobras Are Still Underway

brazil: transfer of rights renegotiation with petrobras are still underway

The Brazilian federal government will probably have to pay Petrobras as part of re-negotiations of a transfer of rights contract, and the payment will likely be made in oil, Minister of Mines and Energy Fernando Coelho Filho said on Tuesday.

"The expectation is that the Union pays Petrobras," he said. "This payment can be made in oil. Petrobras did not disagree, but we did not reach the next level."

He said that the renegotiation of the transfer of rights contract with Petrobras should be concluded later this year. After that, the government should send to Congress a bill to allow other companies to explore the remaining oil areas currently restricted to Petrobras by the transfer of rights.

The transfer of rights is a system that has given Petrobras the right to explore and produce up to 5 billion barrels of oil and gas in the pre-salt layer in exchange for a company reimbursement to the federal government. Contract values, however, are being revised, as oil prices fell from almost US$ 100 to about US$ 50 a barrel since signing the agreement.

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