Brazil:
Brazil opens its oil industry
Date: July 1998.

Brazil’s National Petroleum Agency (ANP) announced in July that it would open certain oil exploration and production areas to private investors. The announcement has been considered a crucial step in the liberalization of the sector by industry analysts.

A high-ranking Petrobras official involved in the negotiations told the local press that out of the 32 projects in the exploration and production areas being discussed with private investors, 25 have already been pre-assigned and another 7 are in the final stages of negotiation. These 32 projects represent around US$4.5 billion in investments for the next three years. Out of this amount, US$ 1 billion will be destined to exploration activities and the rest to production. ANP´s director David Zylbersztajn, estimates that the liberalization of the oil industry should generate some 200,000 direct jobs in the next five years.

The ANP allowed Petrobras to maintain 91% of all oil exploration and production concessions, but it has cut Petrobras’ requested exploration area 32.9%, opening it to private investments. The assigned companies could start exploring the designated areas as early as the first quarter of 1999, press agencies said. At least 70 foreign firms have approached Petrobras interested in establishing joint ventures to explore these areas, London’s Financial Times reported. The newspaper added that the organization has signed 37 preliminary agreements for joint exploration ventures with foreign oil firms.

 

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