Petrobras: Iara field is a-go
Iara field production set to continue
Brazil's state-run Petrobras will start production in the offshore Iara field even if Congress does not approve new rules for divvying up oilfields partly owned by the state, a Petrobras official said today.
Analysts say development of Brazil's massive pre-salt reserves could be slowed by a legislative overhaul of oil laws that would affect "unitisation," the process of dividing up fields that extend beyond their original exploratory blocks.
Petrobras pre-salt executive Jose Formigli said the company could begin preliminary production at Iara without the need for new legislation as long as it previously negotiated the unitisation with Brazil's petroleum agency.
"In unitisation, according to the law I can advise the ANP and the ANP will temporarily represent the state to carry out that negotiation," Formigli said.
Iara is the only field in Brazil's pre-salt reserve that has been officially designated for unitisation, a Reuters report said.
Britain's BG Group and Portugal's Galp are Petrobras partners in the Iara field.
The government of President Luiz Inacio Lula da Silva wants to change laws governing oil reserves to ensure the government keeps its fair share of new-found wealth.
The government stopped new auctions for exploration almost two years ago while it prepared the changes, but still has not presented a formal proposal.
Petrobras in May began an extended well test at the Tupi field, believed to hold some 5 billion to 8 billion barrels of oil.
Last week the company stopped production at Tupi due to an equipment problem but says it will bring the operation back online within three to four months.