Brazilian Government announces new development model for pre-salt oil fields
Government States New Model Will Offer Profitable Opportunities for Foreign Operators While Promoting Responsible Development of the Brazilian Economy
Brazilian President Luiz Inacio Lula da Silva announced a new development model for the exploration and production of petroleum in Brazil’s offshore “pre-salt” region, which includes the largest oil discovery in the Americas in three decades and the biggest estimated oil and natural gas volume under evaluation worldwide. The development model, which still needs to be ratified by the National Congress in order to be enacted, includes a new production sharing system for contracts, a new public company for pre-salt contract agreement and administration, and a new social fund for investment in education and mitigating poverty in Brazil.
Minister of Mines and Energy, Edison Lobao, states that the production sharing system introduced in the new development model reflects a change in Brazil’s standing from an oil importer to a self-sufficient global energy producer.
“With the discovery of the pre-salt oil fields in 2007, the realities of Brazil’s energy reserves have changed profoundly as have the risk-reward ratios,” he stated. “In 1997, when Brazil adopted a concession model, the level of risk for exploration was much higher with much lower profitability than currently estimated for the pre-salt play. As an oil importer, the country sought investments. Today, the Brazilian economy is sound and well-balanced; the country has a diversified industry and is self-sufficient in petroleum. For strategic reserves with low risk and high profitability, as is the case in the pre-salt area, the production sharing system is more suitable.”
The Brazilian government believes that the profit sharing system will continue to offer excellent investment opportunities to external parties.
“The pre-salt layer is profitable, Petrobras is a globally reputable partner and investors can benefit from the production of Brazil’s oil reserves, profiting from this market,” remarked Minister Lobao.
The pre-salt region refers to an 800 kilometers (500 miles) long area, approximately 270 kilometers (170 miles) off the coast of Brazil in the Atlantic Ocean. The region is referred to as “pre-salt” because its oil is located beneath thick layers of rock and salt over 7 kilometers (21,000 feet) below the sea surface, or 5 kilometers below the sea bottom. Specialists estimate that it holds more than 50 billion barrels of oil equivalent.
Production Sharing System
The first tenet of the new development model involves Brazil’s shift from a concession model to a production sharing system for the award of new contracts.
Under this system, Brazil’s state-controlled oil company, Petrobras, will be the operator of all contracts for exploration and production of the Pre-salt layer. Interested parties can seek contracts through a partnership agreement. The shared contracts may be entered into directly with Petrobras or by means of an open bidding, and Petrobras will receive a minimum participation of 30% of the costs incurred and profits obtained in the business. In addition, the National Treasury will become a partner of the companies investing in the exploration, sharing the profits and receiving part of the oil.
The production sharing system will apply to new contracts signed for fields in approximately 72% of the pre-salt currently interpreted area. Previously awarded contracts — which involve roughly 28% of the pre-salt region — will remain unchanged.
Public Company
The government’s new model also includes the creation of a public company responsible for controlling and monitoring the cost of exploration and production of pre-salt and the administration of sharing contracts.
This company will represent the country in the consortia and operating committees to be created for directly managing different sharing contracts and monitoring all activities in exploration and production (E&P).
“We have evaluated global best practices to determine a model that would balance our resource wealth with our economic stability and the social development of our citizens. We believe this new model will promote the responsible development of the Brazilian economy and maintain our status as a trusted partner in the global economy,” stated Minister Dilma Rousseff, Chief of Staff of the Brazilian government.
New Social Fund
Finally, the new pre-salt development model will establish a New Social Fund (NSF) that will set up a stable and consistent means to direct revenues from pre-salt exploration towards investments in poverty reduction, education, and science and technology.
The fund will have the form of a public savings account that receives income from various sources, such as royalties, signings, bonuses and commercial revenues from petroleum and natural gas, originated in production sharing, and resources from activities such as mining.
“The primary objective of this new system is to ensure that Brazil maintains the steady rate of socially inclusive economic growth that we’ve experienced in the past five years. As our economy has developed, we have put active social policies in place to lift citizens out of poverty and strengthen the middle class with aggressive investments in education, and a strong stance against violence by combining social initiatives with crime prevention. The establishment of this new social fund reflects a measured, long-term view to our future,” added Minister Dilma Rousseff.
The Secretariat for Social Communication (SECOM) of the Presidency of Brazil is responsible for coordinating the Public Relations activities for the government of Brazil.
Source: SECOMa
While July Fourth is America’s favorite grilling holiday, other countries celebrate their National Holidays much the same way
While the Fourth of July barbecue is as uniquely American as baseball and apple pie, the first International Weber GrillWatch Survey(TM) shows that outdoor cooks around the globe celebrate their own national holidays in much the same way.
Independence Day is the number one grilling holiday in the United States, according to the Survey, with 88 percent of American grill owners choosing to cook outside during this day. Interestingly, grillers from Canada and Australia also cite their countries’ national holidays as their top days for grilling–as well as those from France and Denmark.
The recent International Weber GrillWatch Survey, the only one of its kind, probes the grilling habits, knowledge, and preferences of 15,614 grill owners in 15 countries across five continents, representing a total of 390 million grillers in countries with populations totaling 2.1 billion people:
Canada / Canada Day: Canada Day commemorates the July 1, 1867 enactment of the British North America Act (which united Canada as a single country of four provinces), and is the top grilling holiday with 73 percent of Canadian grillers cooking outside. Labour Day is a close second there at 63 percent, followed by Father’s Day (53 percent), and Victoria Day (50 percent).
Australia / Australia Day: Australia Day is celebrated annually on January 26. It recognizes the 1788 arrival of the First Fleet at Sydney Cove and the proclamation of British sovereignty over the eastern seaboard of Australia. According to the Survey, 69 percent of outdoor cooks there grill this day, with Christmas and New Year’s Day as a close second and third (65 and 63 percent, respectively).
France / 14 Juillet (Bastille Day): Fifty-four percent of French grillers cook outside on Bastille Day, the national holiday commemorating the end of the French Revolution and the symbolic storming of the Bastille. Ponts du mois de Mai (long holiday weekends in May) are second at 52 percent.
Denmark / Grundlovsdag: Fifty-two percent of Danish Survey respondents say this is their favorite day to barbecue, making it the number one choice. While not an official holiday, the Danes celebrate this day when King Frederik the VII signed the first Danish democratic constitution on June 5, 1849-putting an end to the absolute monarchy. Coincidentally, it’s also Father’s Day there.
Norway and Sweden / Mid-summer’s Eve: Called St. Hans aften in Norway and Midsommarafton in Sweden, 81 percent of Norwegian and 75 percent of Swedish Weber International Survey respondents cite this June 23 holiday as their favorite. Also according to the Survey, both countries choose their respective national holidays as their second most popular times to cook outdoors: Fifty-eight percent of Norwegians grill on Nasjonaldag (celebrating the 1814 ratification of the country’s constitution) and 40 percent of Swedes grill on Sveriges nationaldag, which celebrates their country’s origins.
Here are some more favorite grilling holidays from other countries that were included in the International Weber GrillWatch Survey:
Mexico / Dia del Padre: Mexican grill owners responded that Father’s Day is a top grilling holiday at 57 percent, but their number one favorite occasion to grill overall is birthdays (77 percent).
Brazil / Ano Novo: New Year’s is a huge grilling holiday in Brazil, with 78 percent of Survey respondents there celebrating around the barbecue.
Germany / An Geburstagen (birthdays): While 76 percent of German Survey respondents cited birthdays as their favorite occasion to grill, Pfingsten, a religious holiday, is second at 56 percent. Pfingsten celebrates Pentecost, 50 days after Easter Sunday.
UK / Summer Bank Holiday: Eighty-two percent of UK grillers cook outdoors on the Summer Bank Holiday that falls on the last Monday in August.
Holland / Verjaardag: The Dutch choose birthdays and anniversaries as their favorite grilling occasions (69 percent) with Pinksteren, a religious holiday celebrating Pentecost, second at 37 percent.
Spain / 15 de Agosto Asuncion: International Weber GrillWatch Survey respondents in Spain choose this August 15 holiday as their favorite day to cook outside (57 percent); it commemorates the assumption of the Virgin Mary.
Italy / Ferragosto: As their top grilling occasion, 76 percent of Italian grillers light the outdoor barbecue on August 15 to also recognize the assumption of the Virgin Mary during the middle of the country’s month-long August holiday.
India / Festival Season: While store-bought barbecues is a slowly burgeoning market in this country, 56 percent of those who grill choose birthdays as their favorite occasions followed by the late summer/early fall “Festival season” at 50 percent.
Methodology
All online fieldwork was conducted by U.S.-based Greenfield Online in 12 countries, while telephone interviews in Mexico and India were conducted by TNS, and in Brazil by Synovate. Final data was analyzed by Denver-based KeyStat Marketing, Inc.