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New Brazil firm to manage sub-salt oil reserves
November 13, 2013, 9:28 am


Two Chinese energy firms won a production sharing contract to develop the pre-salt oil discovery in Brazil’s Libra oil field [AP]

The Brazilian government has set up a state-owned company to manage the exploration of the Latin American nation’s sub-salt oil reserves.

Pre-Sal Petroleo (PPSA) will be overseen by Brazil’s Mines and Energy Ministry.

The new company will be in charge of managing the exploration of the Libra field, which was auctioned by the government last month.

A consortium formed by Brazil’s state oil giant Petrobras, France’s Total, Royal Dutch Shell, and China’s CNPC and CNOOC won the bid.

A Libra exploration contract will be signed next month and Petrobras will serve as the operator of the field.

PPSA President Oswaldo Pedrosa has hinted that production at Libra may begin in 2018-2019.

Brazilian President Dilma Rousseff signed a decree in August to create the state-owned company.

President Rousseff announced earlier that her government will channel more funds from the nation’s oil profits to strengthen education and public health sectors.

“We will only become a developed country if we use the finite wealth we have – for example, the royalties from oil and the resources of the (oil-financed) Social Fund – on education,” said the president.

“A country the size of Brazil can only transform into a developed nation if it invests in education,” she said.

Brazil witnessed massive anti-government protests in June demanding better public services and an end to corruption.

Source: Agencies