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Brazil: New State Petroleum Company Created

(Aug. 5, 2010) On August 2, 2010, Brazilian President Luiz Inácio Lula da Silva sanctioned a bill that created a new state petroleum company, Pré-Sal Petróleo S.A. The new government company will be subordinate to the Ministry of Mines and Energy, which will indicate the executive directors to be nominated by Lula to run the company.

Pré-Sal will manage the contracts for the exploration of petroleum and natural gas in the pre-salt area (oil reservoirs beneath the salt layer located five miles deep in the ocean along the Brazilian coast), but will not directly participate in the exploration, production, or sale of petroleum. (Lula Sanciona Projeto que Cria Estatal para Gerenciar o Pré-Sal, O GLOBO ONLINE (Aug. 2, 2010),