Ex-Im Bank to finance subsalt development off Brazil

Acting through the Export-Import bank, the US agreed to increase financial support by $8 billion to $10 billion for development of subsalt oil reserves off Brazil.

Aug. 6, 2009

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Aug. 6 – Acting through the Export-Import bank, the US agreed to increase financial support by $8 billion to $10 billion for development of subsalt oil reserves off Brazil.

Ex-Im Bank approved in May a $2 billion preliminary commitment to encourage purchase of US goods and services by Petróleo Brasileiro SA (Petrobras), which plans to invest $174 billion in development over the next 5 years. Weeks later, Petrobras completed negotiations with the China Development Bank for a 10-year $10 billion bilateral credit line.

By the end of this month, Brazilian President Luiz Inacio Lula da Silva is expected to present to congress several bills concerning development of the country's subsalt reserves, after an advisory commission submitted its proposals to the president Aug. 5.

According to Energy Minister Edison Lobao, the report advises designating Petrobras as operator of all new subsalt licenses, which it would develop through partnerships with international oil companies. Another key measure includes formation of a state-run subsalt regulatory body, Petrosal, to manage exploitation of hydrocarbon resources and collect production entitlements from operators.

Contact Eric Watkins at [email protected].