UPDATE 1-Brazil oil law to be introduced soon--Lula

Tue Aug 18, 2009 9:07pm EDT

Related Topics

* Oil law changes to go to Congress in next 2 weeks--Lula

* Laws aim to regulate vast sub-salt oil reserves

* Funds to fight poverty, help education, science--Lula (Updates with details of what Lula wants law to do)

BRASILIA, Aug 18 (Reuters) - Brazil's government will send to Congress in the next two weeks its proposed changes to oil laws aimed at regulating the exploration of vast sub-salt oil reserves, President Luiz Inacio Lula da Silva said on Tuesday.

The government proposal is expected to boost the role of state-run Petrobras (PETR4.SA) (PBR.N) in the development of the off-shore reserves, which have drawn the attention of the world's biggest energy companies.

"Next week, or the week after, we will send the law regulating (the sub-salt reserves) to Congress, and we will be able to transform this country," Lula said in a speech at an inauguration of public works in the state of Rio de Janeiro.

Part of the resources would go to projects aimed at eradicating poverty, promoting education and boosting science and technology, he said.

"We will create a fund ... so that we can solve three things in this country," Lula added.

Lula wants to increase state control over the sub-salt fields, create a state fund for oil wealth and found a new state-run energy holding firm. [ID:nN05240759]

His proposal to Congress will likely include additional measures to give Petrobras the upper hand in future rounds of bidding for the deep-sea deposits, which are believed to contain billions of barrels of oil. (Reporting by Isabel Versiani; Writing by Ana Nicolaci da Costa; Editing by Carol Bishopric, Gary Hill)

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