Posted by: thiagoaragao | August 20, 2008

Brazil: Political dispute for the pre-salt layer

The exodus from Brasília because of the municipal elections transformed the political agenda into the “single note samba”: the discussion addressing the model for the exploitation of the petroleum that exists in the pre-salt layer. The predominant idea being discussed is the creation of a state-owned company to dedicate itself exclusively to the area and to the increase of the so-called Special Participations (PEs) of the income to be obtained from the business, which will be collected by the Treasury. These would go from 40% to 80%, with funds being mainly earmarked for education.

 

The proposition was submitted by Minister of Mines and Energy Edison Lobão, and was received by the political circles as a way of the PMDB facing up to the PT party’s domination of the energy sector. Lobão explained that there is no sense in handing over pre-salt layer exploitation to Petrobras because it is now a private company like any other (the state has shareholding control). Specialists feel that behind this argument there is also the fear of leaving the lion’s share under PT control. The party that dominates the company’s administration and applies a wage policy for the structure’s base positions pays more than earnings made by some freelance professionals.

 

The issue occupied the Senate agenda, where there are at least four bills regulating the pre-salt area business already being processed. Some politicians believe that it will be transformed into one of the main items in the 2010 electoral campaign. The pre-salt attracts strong interest despite the fact that it is common knowledge that the wealth that exists there will not be accessible before 2015, which still depends on the development of appropriate technology.


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