Brazil Plans Special Fund For Revenue From New Oilfields.
"Brazil will create a special fund to handle revenues from potentially enormous oil reserves found last year, Guido Mantega, finance minister, signaled Wednesday.
Mantega's remarks came amid reports that Luiz Inacio Lula da Silva, the president, favors a new national oil company to oversee extraction of the reserves alongside Petrobras, the state-run oil group. The minister said oil revenues from the pre-salt layer off Sao Paulo state - expected in three to four years - would go into a special fund possibly similar to one operated by Norway. Lula da Silva was said by people at a meeting of ministers on Tuesday to have argued that revenues from the proposed new national oil company should be spent on education and poverty relief, according to Brazilian media reports. ..." [The Financial Times/Factiva]
AP reports that "... Analysts estimate that recent finds could hold as much as 55 billion barrels of oil. If proven, that could transform Brazil into a major oil exporter. The oil lies off the Rio de Janeiro coast, some 7,000 feet (2,000 meters) beneath the ocean surface and a further 5,000 meters (16,000 feet) below the ocean floor.
Silva told reporters during a visit to a natural gas plant in the northeastern state of Ceara that he was neither 'for or against' creation of the new company, but created a committee of ministers 'to develop a proposal we can debate with Brazilian society.' ..." [The Associated Press/Factiva]
Dow Jones writes that "Revenues from Brazil's recently discovered pre-salt oil reserves will remain with the government and will be used to bolster public sector finances, Brazilian Finance Minister Mantega said Wednesday. Mantega said the government may eventually direct the revenues toward a planned sovereign wealth fund, or may create a separate fund exclusively to receive pre-salt revenues.
'One thing is certain, this (oil) wealth won't be employed for the benefit of company A, B, or C, even if it is a state company,' he said. 'It will be used in part for funding education, in part for healthcare, another part to diminish the debt load and another part to increase foreign reserves.' ..." [Dow Jones/Factiva]
Reuters adds that Mantega further said Wednesday "... the government intends to invest part of the income from newly found sub-salt oil reserves abroad to prevent inflation and the currency from appreciating. ... 'Brazil will do as other countries have done, and won't place all the dollars it receives (from the sub-salt reserves) in the country,' Mantega told reporters. Mantega said a government commission was still studying the shape a new model for the exploration of the sub-salt reserves should take and that the results would be presented at the end of the year. ..." [Reuters/Factiva]