BRASÍLIA: Brazilian President Michel Temer signed into law Tuesday a major shift that will allow foreign oil companies to operate in the country’s massive deep water offshore oil fields.
The law ends the requirement for troubled state oil company Petrobras to be the sole operator in the pre-salt oil fields.
Petrobras, which is reeling from a multibillion-dollar corruption scandal and depressed oil prices, had also been required to hold a 30 percent minimum equity in each of the fields’ blocks.
The end of Petrobras’ grip on the operation will open the door to major investments in a potentially lucrative but hugely challenging environment, with massive reserves.
The law was previously approved by Congress this month and Temer’s green light had been expected.
Petrobras has said it is too short on cash to develop all the fields, which were discovered in 2007 at a depth of some five kilometers (three miles).
In September, the company announced it was cutting investments by 25 percent for the period 2017 to 2021.
Petrobras has already begun selling off stakes, starting with a $2.5 billion deal with Norway’s Statoil.
Foreign firms will also now be able to participate independently in upcoming auctions for more of the Atlantic Ocean blocks.