Relief For Petrobras: Changes To Brazil's Pre-Salt Legislation

On February 24, 2016, the Brazilian Senate approved a bill that would relieve Petrobras of two statutory burdens that industry players view as significant obstacles both to Petrobras and to the development of Brazil's pre-salt oil and gas reserves.

By a 40 to 26 margin, the Senate voted to cancel the requirements that Petrobras be the operator and hold at least a 30 percent working interest in all pre-salt fields. Although the bill faces stiff opposition in Brazil's Congress and from some elements of the executive branch, the Senate's action offers hope as, in the midst of the political and economic crises that have shaken the country's foundations, powerful and influential voices are calling for Petrobras to focus on the short-term profitability that it desperately needs, while allowing private investment to take the lead in developing Brazil's pre-salt reserves.