Oil companies must stay within operational 'security limits': Brazil president

Foreign oil companies are welcome in Brazil, but they must obey the rules and stay within or even below security limits, Brazilian President Dilma Rousseff and Mines and Energy Minister Edison Lobao both told reporters Wednesday at a ceremony in Rio de Janeiro.

"The companies, and the ANP has a crucial role in this, have to guarantee operational security," Rousseff said at a ceremony to inaugurate Magda Chambriard as the new president of Brazil's National Petroleum Agency, or ANP as it is commonly known. "It is necessary to stay within the limits of security and sometimes below the limits of security."

Mines and Energy Minister Edison Lobao also addressed the escalating controversy surrounding the spill in November of 2,400 barrels of oil in the offshore Frade field, which has led to a charges and fines against Chevron and Transocean, and to a Brazilian judge earlier this week barring local executives from both companies from leaving the country.

"External capital is welcome here in Brazil. It is received well, it participates in important actions," Lobao said. But he also referred to "the rules that we apply to our Petrobras" in terms of operational security. Chambriard did not directly refer to the Chevron/Transocean matter.

Instead, she referred to the problems Brazil has experienced with falling supply of ethanol in the face of rising demand, which has caused many motorists to switch to gasoline.

"This is one of the biggest challenges in front, to guarantee that the production of ethanol is what our country needs," Chambriard said. Rousseff echoed her comments: "Ethanol cannot lack in Brazil," she said. The president also highlighted ANP's role in regulating Brazil's "national content" rules, saying the country needed to avoid the so-called "Dutch disease" that causes the de-industrialization of oil producing countries.

Both Chambriard and Rousseff made reference to the wider social and economic benefits that revenue from Brazil's sub-salt oil fields could bring to the country. This is a central plank of government policy.