There was little fanfare when Luiz Inácio Lula da Silva opened the taps last week on the country’s first commercial deep-sea oil ­production on a floating platform 85km off the coastline.

But then the Gulf of Mexico oil spill has punctured some of the early exuberance that swept Brazil and the oil industry three years ago when the country discovered deep-sea reserves containing some 50bn barrels of oil and almost overnight became a “petro-power” in the making.

“People know there is risk involved in deep sea operations, but you never want to see a leak, or any accident related to the risk involved in a drilling project, like what happened in the Gulf,” says Raphael Moura, safety co-ordinator at Brazil’s national oil regulator, ANP.

Although Brazil is continuing with plans to develop its deepwater reserves, led by state-controlled oil major Petrobras, the BP accident is expected to raise insurance prices for deep-sea drilling. Regulatory changes are meanwhile expected to introduce delays and drive up costs.

An ANP-led safety review, under which field operators must say what they would do if they faced a BP-like situation, is expected to take a year. “It is very important to complete a deeply technical investigation before deciding on regulatory changes,” says Magda Chambriard, ANP director. “We only have a preliminary vision.”

The trouble is that leaves the industry in limbo in the meantime – as can be seen in the regulatory uncertainty surrounding BP’s mooted purchase of 10 deep-sea blocks from Devon Energy. BP expects the deal to be approved by year end, although the ANP has said it is reviewing the deal “with the Gulf of Mexico in mind”.

“The ANP knows it has to look into environmental issues more carefully,” says Jose Virgilio Lopes Enei, a Brazilian oil and gas lawyer. “They are expected to be more rigorous, but they don’t know how.”

One problem is that Brazil’s deepwater technical challenges are even greater than in the Gulf. Its “pre-salt” basin – so called because oil and gas deposits are buried several kilometres beneath the ocean floor under a layer of salt – is much deeper than BP’s Deepwater Horizon well. The fields, about 280 miles off the southeastern coast of Brazil, are also farther from shore.

Furthermore, high temperatures and large quantities of carbon dioxide in the pre-salt can damage drilling parts. The salt formations can also act like a sponge and drilling through can create fissures, making it difficult to control the drilling hole.

In some ways, though, Brazil is better prepared than the US to open up a deepwater oil province.

Brazilian regulations are generally seen as tougher than in the US, where the Minerals Management Service has faced criticism for allowing the industry to “self-regulate”.

Furthermore, a run of local disasters in the early 2000s – including an oil leak of 0.3m gallons that was dubbed “Brazil’s Exxon Valdez”, and the sinking of the P-36 oil platform that killed 11 – has already led Petrobras to improve safety procedures. Unlike many of its oil major peers, Petrobras has kept its engineering and deep sea expertise in-house, rather than outsourcing it to service companies.

“These internal resources are of huge importance to be able to promptly intervene in emergency situations,” says Ildo Luís Sauer, a former Petrobras Gas & Energy director.

But some worry that the government has overloaded Petrobras. Brasilia wants to reform the current concession regime and lease remaining deepwater exploration blocks through production-sharing agreements that would give Petrobras a minimum 30 per cent stake in future contracts and would make it the only operator in the remaining 72 per cent of unleased blocks. A further stake would be granted to Petrosal – a new state entity that will represent the government’s interests – to be calculated from net production; ie, the amount left after exploration and production costs.

As Mr Lula da Silva sees it, this ensures “the best operator” is in the driver’s seat when navigating through the perilous ultra-deep-sea oil fields. Others wonder if Petrobras is fully up to the task.

“There are three big areas we are studying in Brazil in the next 12 months – regulation, the federal election and the inability of Petrobras to handle everything it has on its plate,” says a leading oil company manager.

The bill that would reform the current concession regime has been delayed until after Brazil’s presidential elections in October, and may well be scrapped if José Serra, the opposition candidate, is elected over Mr Lula’s chosen successor, Dilma Rousseff.

A further uncertainty surrounds Petrobras’ proposed $25bn share issue, which the company will use to buy from the government the rights to 5bn barrels of oil. But delays over valuing those reserves has postponed the issue from July until at least September – just before the elections.

Although Petrobras has played down similarities between the Gulf and the pre-salt fields, BP’s accident and uncertainty surrounding the share issue has helped make the stock the world’s second-worst performing oil company this year – after BP.

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