Brazil says likely to sign Iran oil sector deal

TEHRAN (Reuters) - Brazil and Iran are likely to sign a memorandum which would open the way for Brazilian companies to participate in the modernization of Iran’s oil sector, the head of Brazil’s energy regulator said on Saturday.

Brazilian President Luiz Inacio Lula da Silva visits Iran this weekend to help mediate in a standoff over the Islamic Republic’s nuclear program, as Brazil seeks more diplomatic clout on the world stage.

“We have equipment, the engineering and the parts for the oil sector that can help in their modernization,” Haroldo Lima told Reuters after meeting oil sector representatives in Iran.

In exchange, Iran could provide Brazil with drills to help in the exploration of deep-water oil, said Lima.

“In Brazil we have a great shortage of companies that have the capacity to do this exploration. They are making drills available,” he said.

Brazil discovered some eight billion barrels of crude in the Tupi field in 2007, opening a new oil exploration frontier deep below the Atlantic that could hold more than 50 billion barrels.

Lima said the Iranians told him they had plans to privatize some of Iran’s refineries and had urged Brazilian companies to participate in this.

Lula is seeking to persuade Iranian President Mahmoud Ahmadinejad to revisit a stalled proposal by the International Atomic Energy Agency under which Iran would send low-enriched uranium abroad and receive higher grade uranium in return.

The United States and some of its allies accuse Iran of trying to use its civilian nuclear program as a cover for pursuing nuclear weapons. Iran denies this, saying its program is solely to generate electricity.

Lula’s visit to Iran reflects Brazil’s ambition to become a leader in global affairs, fitting for one of the world’s top ten economies, analysts say.

Writing by Ana Nicolaci da Costa