New laws place Brazil's oil and gas firmly under state control

Policy decisions hand Petrobras significant control of Brazil's offshore oil resources, pushing private-sector explorers to look to shallower waters

BRAZIL'S government has passed long-awaited legislation that will enhance the state's control over the country's oil industry. The Senate passed two important bills last month that will transform the industry. Despite predictions of roadblocks – with President Luiz Inácio Lula da Silva's term set to end on 1 January 2011 and much of the football-mad country brought to a halt by the World Cup – the ruling party was able to muster enough votes to pass a law authorising the government to transfer drilling rights for up to 5bn barrels of oil equivalent to state-controlled Petrobras, as well as participate in the company's planned rights-issue. Petrobras says it will continue talks with the gover