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Brazil signs agreement with oil consortium

Staff writer |
Brazil signed an agreement with a consortium of five oil companies to develop a huge offshore field under the production-sharing regime that gives the federal, state and municipal governments a 75 percent stake of the oil extracted.

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In October the consortium made up of Brazil's state-owned oil company Petrobras, Shell of the Netherlands, France's Total and Chinese state companies CNOOC and CNPC won the right to develop the Libra offshore field.

Located off the coast of Rio de Janeiro in the Santos Basin, Libra is a pre-salt reserve believed to hold up to 12 million barrels of recoverable oil.

"By signing this document we are establishing the basis for a more just and less unequal nation and for a period of prosperity that will benefit Brazil for many decades," President Dilma Rousseff said.

Under the production-sharing system, part of the royalties that will go the federal government will be earmarked for social programs while another part will be used to fund health and education projects by the federal, state and municipal governments.

The Libra deepwater oil field that Brazil plans to auction off October 21 will yield minimum output of 1 million barrels of crude per day (bpd), the National Petroleum Agency (ANP) said in July.

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