Brazilian Energy Minister Edison Lobao said proposed changes to the country’s oil regulations will not scare investors away as extraction costs will be “absolutely competitive”.

Lobao cited estimates from state-run oil company Petrobras putting crude production costs for the so-called subsalt reserves deep under the ocean floor at $40-50 per barrel, which makes them attractive even after the recent drop in oil prices.
“It is absolutely competitive ... Investment will continue to flow like it does in Norway, we will have a queue of candidates,” he told Reuters on Friday in an interview on the fringes of a Brazil-Portugal business meeting in Lisbon. He said the cost, which includes the government take, compares to $32 per barrel for project in Brazil that are easier to drill.
Petrobras last November announced a recoverable reserves estimate for the giant subsalt field of Tupi of between 5 billion and 8 billion barrels. It has since made other promising discoveries.
Lobao said his proposal to create a 100 percent state-owned company to manage the huge reserves, which lie under a thick layer of salt, would create a sort of a coordinating agency rather than a producing company and should not scare Petrobras stockholders or investors.
He said the existing oil market regulator, the National Petroleum Agency (ANP) had a different function and could not keep the proceeds from oil production by law, so a new body was needed.
Other possible measures include increasing taxes and royalties on oil exploration and production for future contracts. Lobao reiterated the government’s position that existing concession contracts will be left intact.
(Source: guardian.co.uk)