BRAZIL: New Law Would Put Oil Revenue into Development

[Judi Lynn]

BRAZIL: New Law Would Put Oil Revenue into Development
By Fabiana Frayssinet

RIO DE JANEIRO, Aug 31 (IPS) - On what he referred to as "a new independence day for Brazil," President Luiz Inacio Lula da Silva announced Monday proposed new legislation that would increase state control over the management of the country's enormous offshore oil finds, with the aim of channeling much of the state's oil revenue into a national social fund.

The oilfield was discovered two years ago in an area of nearly 800 square km, at a depth of seven km, beneath a layer of salt up to two km thick which extends 500 km offshore in the Atlantic Ocean from the state of Espíritu Santo to Santa Catarina.

Lula said Brazil must take advantage of the reserves to strengthen Brazil's state oil company, Petrobras, which trades on national and international stock exchanges.

On his weekly radio programme "Coffee with the President", Lula said "We are talking about very large reserves that put Brazil among the world's largest oil producers."

"The subsalt oilfields are a gift from God - wealth which, if properly managed, can drive major transformations in Brazil, improving living conditions for our people," Lula added later, during the official ceremony held to announce the proposal, which must still be approved by Congress.

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