If oil is black gold, then Brazilian Congress is about to unlock a treasure fit for King Midas. The key is the so-called “transfer rights” bill, currently pending in the Senate and the subject of voracious negotiations between lawmakers and the future government about how to distribute a fortune of more than BRL 100 billion. The story goes back to 2010 when the Brazilian government increased its stake in state-owned oil company Petrobras.
By that time, the federal government and Petrobras had made the transfer rights agreement, under which Petrobras paid roughly BRL 75 billion to exploit 5 billion oil barrels on the so-called “pre-salt” layer. In return, the government paid BRL 49 billion for shares of the company, which aimed to increase its ability to develop the project.
Since then, Brent prices have dropped and a lot more oil was discovered: estimates project between 6 and 15 billion extra barrels. Meanwhile, Petrobras’ net debt increased so much that it became the largest in the world for the oil and gas industry. More resources and fewer means to exploit them led both parties to reassess the transfer rights agreement.
The process is still ongoing,...
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