BRASILIA - Brazil will have crude for half a century and become a leading oil exporter and “an important player in international geopolitics”, the country’s energy minister has said during a congressional hearing.

Edison Lobo said Wednesday that thanks to the vast potential of its pre-salt region, so-named because the estimated 50-80 billion barrels of oil equivalent it contains are located in the sea bed beneath an unstable salt formation, Brazil could produce some 3.8 million barrels per day within 10 years, or double its current output.

Lobo said that if that estimate is confirmed Brazil will become “an important crude exporter”, although President Luiz Inacio Lula da Silva maintains that the country also plans to invest heavily in the petrochemical sector so it can sell oil derivatives and not just unrefined crude.

The minister took part in a hearing of the lower house’s Mines and Energy Committee, which is debating the regulatory framework that the government submitted late last month for the pre-salt region, discovered in 2007.

The bill proposes assigning the dominant role in the nation’s petroleum industry to state-controlled Petrobras, which, according to the minister, is a company that “is the envy of everyone”.

Lobo said technological advances have transformed the Brazilian company into a world leader in deepwater exploration and production and that that expertise will help it exploit the pre-salt fields, which lie as much as 7,000 metres below the ocean floor.

He also defended the government’s proposal to make Petrobras the sole operator of all the pre-salt fields yet to be exploited; in the case of joint ventures with a Brazilian or foreign company, Petrobras will have a minimum stake of 30 percent.

The government also recommends creating a new state company to supervise the execution of the contracts, as well as injecting a monetary sum equivalent to five billion barrels of oil into Petrobras.

Lobo said the capitalisation plan will be necessary due to the high exploration and development costs associated with the pre-salt reserves, estimated to total about $210 billion over the next 10 years.

–EFE