Latin American Law & Business Report Guest Article: Re-Opening the Genie’s Bottle - What’s in Store for Latin American Energy in 2013: Focus on Brazil

05/13/2013

This multi-part article provides an overview of recent developments and upcoming opportunities in Latin American energy markets. This first article will cover Brazil, and in particular: (1) the 11th oil and gas bid round, (2) the dispute between the states as to the distribution of oil and gas royalties, (3) a possible non-conventional gas bid round later this year, (4) a possible Pre-Salt bid round based on the new production sharing contracts (“PSCs”), (5) the Petrobras divestiture plan, and (6) Law 12,783/13 and the Brazilian power sector.

Background on the Brazilian Oil and Gas Sector
Prior to 1995, the Brazilian Federal Constitution provided that the government was not allowed to assign or grant any type of participation in the exploration, production, refining, importation, exportation, and transportation of crude oil and natural gas. Under this old regime, only Petrobras,as the Brazilian national oil company, was authorized to perform these constitutionally protected activities.

However, in November 1995, the Brazilian Congress amended the Brazilian Constitution to allow the Brazilian Government to contract with private and public companies to carry out these previously restricted activities in accordance with a federallaw to be enacted. Importantly, there were no nationality restrictions, provided the foreign investor formed a local entity. Almost two years later, the Brazilian Petroleum Law (“BPL”) was enacted.

Excerpted from the Latin American Law & Business Report. To read the full article, click on the PDF linked below.

PDF: What's In Store for Latin American Energy in 2013 - Focus on Brazil.pdf

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