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Brazil is expecting the first revenues from oil sales under the new production-sharing agreements it has with foreign oil companies to start flowing into the state coffers this September, according to Ibsen Flores, the head of the company that manages these contracts, who spoke to Reuters.
The PSAs were introduced by the government of Ignacio Lula da Silva to replace previous royalty payments and to ensure the state gets a bigger portion of the revenues derived from the deposits in Brazil’s presalt layer.
Flores also said that he has held talks with several firms interested in acting as Brazil’s official oil sellers, as the law governing the production sharing agreements states. According to Flores, the pick will be among the oil companies already operating in Brazil, but he didn’t provide any further details.
The first oil that Brazil will sell under a PSA will come from the Libra field, which is ran by a consortium comprising Shell, Total, CNPC, CNOOC, and Petrobras as operator. The field should start commercial production this July, with daily average output of some 30,000. Brazil’s share of this is 13,000 bpd.
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Earlier this month, Petrobras said the Libra field – one of the biggest finds in the presalt offshore layer – will need investments of $5.5 billion over the next five years, without specifying if this amount refers to its own share or the total investments to be made by all the partners in the consortium.
The country is determined to stimulate foreign investment in its oil and gas industry. After removing a requirement that Petrobras should be operator of all new projects in the presalt layer, last month the government also relaxed local content requirements for foreign energy companies, which they saw as a stumbling block on their path in Brazil. The move comes in preparation of new oil and gas block tenders scheduled for this year and next.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.