PETROBRAS: Transfer Of Rights Deal Might Require New Law, Says Minister

(RTTNews) - The Brazilian government might need to adopt new legislation to conclude a deal with Petrobras regarding de transfer of rights area, according to the country's Planning Minister, Esteves Colnago.

"A law may be necessary at the end of the negotiation. We would have to reach an agreement with Petrobras first. After that, then we might need a law amendment, but we are still checking if that would be necessary," Colnago said, without providing further details.

The "transfer of rights" is a system that has given Petrobras the right to explore and produce up to 5 billion barrels of oil and gas in the Brazilian pre-salt layer in exchange for a company reimbursement to the federal government.

Contract values, however, are under review, as oil prices fell from almost US$ 100 to about US$ 50 a barrel since the signing of the agreement, recovering to around US$ 70 barrel as of recently.

Petrobras argues that the government should pay the company to make up for the difference. Analysts say that one way the Brazilian government could solve the dispute would be to pay Petrobras with extra oil from the "transfer of rights" area.

The government, however, argues that he owes nothing to Petrobras and should receive more payments from the company.

Negotiations between Petrobras and the government are scheduled to take place until next Thursday but could be extended for 60 days.