Brazilian interim government seeks to ease oil exploitation rules

Brazil's interim President Michel Temer Tuesday announced a decision to give the national oil company Petrobras more flexibility with investments in the exploitation of pre-salt subsea oil fields.

"We must leave it up to them (Petrobras) to decide whether it is worth the effort or not to participate (in pre-salt exploration). Petrobras should organize themselves according to their interests," Temer said in a speech at the presidential office.

Brazil's current oil exploitation regulation requires all companies interested in exploring pre-salt -- an oil deposit in the coastal region between the states of Rio de Janeiro and Sao Paulo -- to join with Petrobras to exploit oil and make huge investment.

However, the provisional government believed the pre-condition has reduced the interests of third parties in participating in oil exploitation.

The proposed softening of regulation was rejected by the Workers' Party and oil unions for fear that this would reduce public revenues drawn from the oil industry.

For his part, Temer said the government should play a smaller role in the economy than before, as part of his "decentralization" plan that supports the governments in bettering its relations with the private sector.

"In Brazil, there was an idea of administrative centralization. Everything was with the government but over time the need for decentralization was shown, in order to improve efficiency," he said.

Temer's interim government will also set up an institution to analyze possible concessions at infrastructure construction and logistics so as to stimulate the engagement of private companies.h "We will have a special department to study and encourage concessions and attract private investment. This will produce growth ... and will generate jobs," said Temer. Endi