At a political convention hosted earlier today, President Dilma Rousseff defended the decision announced on last Tuesday by the National Energy Policy Council (CNPE, by its Portuguese acronym) to grant Petrobras rights to develop additional “pre-salt” oil fields.
The deal will allow the Brazilian state-owned Petrobras to increase oil production of up to an estimated five to 10 billion barrels in exchange for an upfront fee of 897 million USD.
During the convention, Rousseff responded to critics by saying that Brazilian oil profits are a non-negotiable part of Brazilian heritage which belong to the people.
Former President Luiz Inacio Lulu da Silva also gave a speech in which he described Rousseff´s decision as one that reflected the interests of “98% of Brazilians.”
Support from Unions
Lula´s sentiments were confirmed by one of Brazil´s largest labor unions, the Unique Workers Union (CUT), that defended the decision declaring it as an important step towards guaranteeing Brazilian sovereignty and energy interests.
The decision validated the CUT member’s efforts to prevent the auctioning of Brazilian oil fields which began last year.
Boost for the Education Sector
As part of a new education law approved earlier this week, the Brazilian government intends to increase public expenditure on education as a percentage of total GDP from 6.4% in 2014 to 10% in 2024.
The decision will provide a much needed financial boost of 600 billion USD to the Brazilian education sector which is guaranteed 75% of the total revenue generated from oil royalties due to a Brazilian law passed last August.
New Found Energy and Wealth
According to the United States Energy Information Administration, the Brazilian ‘pre salt’ oil reserves were originally discovered in 2007 in the Santos Basin off the coast of Brazil and are believed to contain more than 90% of Brazil´s total oil reserves and is projected to generate $1 trillion in profit by 2020.
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