President Luiz Inacio Lula da Silva of Brazil is lobbying Congress for reforms in their Oil policy to enable government to have a more direct stake in the oil being extracted from its oil fields. Recently Brazil had been the site of a recently discovered oil field that is projected to contain more oil than its oil exporting neighbors.
The new system that the President is pulling for is one wherein the government would own a part of all oil produced. The current system has companies bidding to win the rights to explore for oil in blocks.
The revenue generated from this would be used to help fight poverty in the country. Brazil has one of the world’s highest population and poverty rate.
The irony of Brazil’s recent oil find is that they have been the country that the whole world looks up to as having successfully implemented a transport system dependent on cane ethanol instead of fossil fuel. Only recently the Philippines has signed a pact with Brazil for the latter to assist in the development of the Philippines own biofuel industry.
More background on the controls can be found here and here.
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Category: Oil, Oil Price
