Brazil’s Lula keeps fast-track on oil bill-Senator

Brazilian President Luiz Inacio Lula da Silva rejected on Thursday demands by congressional leaders to take his proposed legislation for more government control of oil production off a fast track, the ruling party chief in the Senate said.

Lula presented on Monday a proposal that would increase state control over new oil deposits and make state-run energy company Petrobras the sole operator of the off-shore fields.

He wanted it on a fast track, which obliges both houses of Congress to vote on the proposal within 45 days.

The proposal would also create a fund to finance health and education projects for the needy, as well as a state agency to administer oil contracts.

“The president maintained the fast-track,” Aloizio Mercadante, head of the ruling Workers’ Party in the Senate, told reporters after the president met with congressional leaders.

Even some legislators from Lula’s own coalition had opposed fast-tracking the proposal to develop the new, massive oil reserves, which could make Brazil one of the world’s top 10 oil exporters.

The move risks heightening tensions with congressional leaders, who feel they are being bulldozed after the government took 18 months to prepare the bill. Opposition legislators said on Tuesday they would boycott voting in the Chamber of Deputies, the lower house of Congress.

But Lula’s decision indicates his determination to see the oil reform passed before general elections in October 2010, analysts said. His second four-year term ends in December of that year and, by law, he cannot run again.

The former union leader hopes the proposal will benefit his chosen presidential candidate, chief of staff Dilma Rousseff, who helped draft the proposed legislation.

Government aides said in recent days that even if Lula were to withdraw the fast-track request, the opposition would try to block or water down the proposal.

Abandoning fast-track would open the door to endless debate and delays, they said.

Lula has an ample majority in the Chamber of Deputies and a narrow majority in the Senate.