Brazil to invest $400 billion to develop offshore oil fields

[Judi Lynn]

November 14, 2008
Brazil to invest $400 billion to develop offshore oil fields
Country to present a new oil model to raise more money next month

RIO DE JANIERO -- Brazil plans to invest some $400 billion over the next 10 years to develop new offshore fields that may contain as much as 80 billion barrels of oil, the National Petroleum Agency, or ANP, said.

The agency's director, Haroldo Lima, told a congressional committee that, now that the country is on the cusp on becoming a leading oil exporter, the current hydrocarbons law must be modified to increase the government's share in the profits.

According to the congressional news service, Lima said at the hearing that companies face "practically zero" risk in exploiting the new finds located in the so-called "pre-salt" layer, some 7,000 meters (22,950 feet) from the ocean surface.

Under the current scenario of low exploration risks, high financing capacity and large fields, it is expected that there will be a hike in the royalties and the special participation tax paid by companies on highly productive wells, the news service said.

In 2007, under the current concession contracts, a total of 7.5 billion reais ($4.24 billion) in royalties and 7.2 billion reais ($4.07 billion) in revenues from the special participation tax was paid into the Brazilian treasury.

It is estimated that the amount from those two payments will total some $9 billion in 2008.

More:
http://www.laht.com/article.asp?ArticleId=320302&CategoryId=14090