Brazil oil law change key to attracting investment: Statoil

BRASILIA (Reuters) - Norway’s Statoil sees changes to Brazil’s oil industry laws, including the end of mandatory participation by Petrobras in all subsalt blocs, as key for attracting foreign investment, Chief Executive Officer Eldar Saetre said on Thursday.

The company logo of Norwegian energy firm Statoil is seen at the headquarters outside Oslo, Norway, November 28, 2014. REUTERS/Berit Roald/NTB Scanpix

Saetre’s comments to journalists followed a meeting with Brazil’s President Michel Temer in Brasilia and he briefly talked to reporters after the meeting, in which he said they discussed Brazil’s business environment and oil industry regulations.

“Having clear rules is very important to the development of Brazil’s oil industry,” said Saetre.

Brazil’s Congress is evaluating proposed changes to the country’s oil legislation, particularly in relation to the vast offshore oil blocs in a region known as the subsalt.

Under current laws, state-controlled oil company Petroleo Brasileiro SA, or Petrobras, is obliged to hold a minimum share of 30 percent of any subsalt bloc. The law also says Petrobras must be the operator in any consortium of companies holding a new license for a subsalt area.

Petrobras has been tangled for two years in a vast corruption scandal and its debt load is the largest in the global oil industry, which many see as an obstacle to future licensing rounds.

Petrobras CEO Pedro Parente himself has argued for changes in the law, saying he would like to have the freedom to decide in which blocs the company will participate.

“Being an operator for us is really relevant,” said Eldar Saetre, regarding the possibility of Statoil leading a consortium in a subsalt bloc.

Statoil announced in July it would pay Petrobras $2.5 billion for a 66 percent share in the BM-S-8 offshore license, a high-potential subsalt area known as Carcara.

Statoil’s current partners in Carcara are Portugal’s Galp Energia SGPS SA, Brazil’s QGEP SA and privately owned Barra Energia do Brasil Petróleo e Gás Ltda. Barra Energia is backed by U.S. investment funds Riverstone Holdings LLC and First Reserve Corp.

Reporting by Maria Carolina Marcelo; Writing by Marcelo Teixeira; Editing by Chris Reese