Petrobras to Hold Stake, Operate All Pre-Salt Wells

Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, will have a stake in all so- called pre-salt oil fields under new rules being considered by the government, the country’s energy minister said.

Petrobras, as the Rio de Janeiro-based company is known, would also be the operator of the fields even if it held a minority stake, Energy Minister Edison Lobao told reporters today in Brasilia.

Brazil is preparing new legislation to govern oil and gas exploration and production in the country’s offshore pre-salt area. The region contains the Tupi field, the largest oil discovery in the Americas in the last three decades.

“Petrobras’s participation will be in the auction rules,” Lobao said. “Petrobras can be the block operator even if it holds a minority stake.”

Petrobras is investing $174 billion over five years to increase production. The company, the world’s ninth largest by market value, is counting on pre-salt oil to become one of the five-largest energy companies in the world by 2020.

“The government will have to use loopholes in the legislation, which currently determines auctions must be held under competitive terms,” said Bernardo Lobao, a mining and energy analyst for BNY Mellon Arx in Rio de Janeiro. “It all depends on each company’s strategy, but most international companies would rather be the field operator.”

Petrobras fell 81 centavos, or 2.6 percent, to 30.87 reais at 3:25 p.m. in Sao Paulo trading. The stock is up 35 percent this year.

“This decision has limited impact on the company’s shares, because Petrobras already has under management large concession areas that it will explore for another 25, 30 years,” said BNY’s Lobao, who isn’t related to the energy minister.

The pre-salt fields are oil reservoirs beneath as much as 3,000 meters (9,840 feet) of water and 7,000 meters of seabed.