Brazil has auctioned production rights to the Libra field, its largest-ever oil discovery, despite domestic opposition.
President Dilma Rousseff has billed it as a crowning achievement of an energy plan aimed at ending poverty and vaulting Brazil to the ranks of developed nations.
There is so much crude oil in the Libra field, according to the experts’ estimates, that it would be able to supply the entire world’s needs for nearly five months.
The discovery pretty much doubles Brazil’s oil reserves and given the opposition to the auction the government was keen to stress that it is going to benefit Brazilians.
The Energy and Mines Minister Edison Lobao said new laws give the government a direct share of future output: “We are not privatising the oil which is trapped deep beneath the seabed under a layer of rock, sand and salt. On the contrary we are appropriating this immense wealth that is below the ocean and the land. Nobody gains anything if it stays down under the surface.
Before the auction he said: “This will open a new chapter in Brazil’s history.” He believes it will transform the economy “in the same way that shale oil and gas are transforming the US economy.”
The Libra field holds an estimated eight to 12 billion barrels of
recoverable oil, according to both Brazil’s oil regulator and a Texas-based oil-reserve certification company.
When it reaches full production – in 10 years time – it is supposed to pump 1.4 million barrels a day.
By law, the state owned oil company – Petrobras – will take a minimum 30 percent stake in the winning group and run the drilling project as operator.
The government says the windfall cash from Libra and other subsalt fields can be spent on education, health care and other social services
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