Page 37: of Marine Technology Magazine (January 2011)

www.seadiscovery.com Marine Technology Reporter 37 which also has been voted and approved by the Brazilian congress; • Project creating the shared production system, which replaces the concession model, still to be voted, but it is widely considered that it will be approved by congress;

The main objectives of the new legislation is to raise funding needed to finance pre-salt E&P and to exploit the pre-salt; guarantee Brazil´s socio-economic development; guarantee that the State is the primary recipient of new oil revenues and Petrobras is the primary operator and at least partner at all fields; exert greater state influence on deci- sions on anything concerning the pre-salt, through the

PPSA.

Petrobras will have a minimum 30% capital stake on each pre-salt venture in future bidding rounds, starting at the 11th round, to take place late 2010 or in early 2011.

Petrobras will also be allowed to bid for larger block shares, if it chooses.

Another change is that Petrobras will be the sole opera- tor of all the new pre-salt concessions and other areas con- sidered “strategic” by future determination of the govern- ment, also from the 11th bidding round on. With this,

Petrobras, will be in charge of all the exploratory opera- tions, which encompass drilling new wells, extended well test- ing (EWT) and new geolog- ical studies to prove the range of the discoveries in all pre-salt areas.

The Brazilian government has decided to shift to the adoption of production sharing agreements, instead of concession agreements, as has been the norm for a long time. The shared production system, which replaces the concession model, introduces the Profit Oil concept, which repre- sents the total produced by a given field, deduced of the costs and expenses associated with producing oil there.

Another concept is the Cost Oil, which corresponds to the costs and investments the contractor makes to undertake the oil research and prospecting activities. This will also come into effect from the 11th bidding round onwards, but will affect all blocks, including pre-salt and post-salt.

The Government´s idea is to harness the bonanza of

Brazil’s pre-salt into a social fund, akin to what was done in Norway, in order to finance much needed social and

Petrobras will invest around $130 billion over the next four years, hoping to almost double its oil out- put, to about 3.9 million barrels a day by 2014.

Petrobras Financial Director is Almir Barbassa all smiles at the NYSE during the share offer. (Photo: Petr obras)