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DJMN: Brazil Panel To Vote Wed On Subsalt Oil Social Fund
BRASILIA (Dow Jones)--A panel in Brazil's lower house is expected to vote Wednesday on a committee report for the first of four measures revising the country's oil and natural gas regulatory framework.
The special panel is expected to approve the lower house committee's report on the measure, which would create a social fund that will invest revenue from newfound oil reservoirs to improve education and ease poverty, according to congressman and former finance minister Antonio Palocci.
"We have a deal on the voting. Even the opposition is in favor, with only some minor details that need to be worked out," Palocci said.
Voting in the panels studying the remaining three measures that comprise Brazilian President Luiz Inacio Lula da Silva's new regulatory framework, however, could end up delayed. But the voting delays on the other measures will be unlikely to affect Wednesday's vote on the social fund, Palocci said.
Lula proposed the measures in September. The measures would give the government a greater stake in recently discovered offshore oil deposits.
The lower house is expected to vote on the measures by Nov. 10, although it's unclear whether the delays will affect that date.
The government wants the measures to be approved in the first half of 2010, but that will be a difficult task given the importance of the measures and the fact that 2010 is an election year. Such a high profile debate gives lawmakers--especially those in opposition parties--leverage in any negotiations over changes.
The new regulatory framework will give Brazil's government a greater stake in offshore oil reserves in the promising subsalt oil region, where several of the world's biggest oil finds in recent years have been made. The government first announced its plans for the new regime in late August.
The so-called subsalt oil discoveries were made recently under a thick layer of salt in the Santos Basin off the coast of Sao Paulo and Rio de Janeiro states. The oil lies under more than 2,000 meters of water and an additional 5,000 meters of sand, rock and a shifting salt layer.
The first of the subsalt discoveries, called Tupi, was estimated to hold recoverable reserves of between 5 billion and 8 billion barrels of oil equivalent. That was the Western Hemisphere's largest oil find in more than 30 years.
-By Jeff Fick and Gerald Jeffris, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com
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(END) Dow Jones Newswires
November 03, 2009 15:44 ET (20:44 GMT)
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