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RUEAIIA/CA WASHDC PRIORITY

C O N F I D E N T I A L SCTION 02 OF 02 SAO PAULO 000335 
 
SIPDIS 
 
STATE FOR WHA/BSC,WHA/EPSC, EEB/ESC 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSON/ADRISCOLL/MWAR D 
DEPT OF TREASURY FOR JHOEK 
NSC FOR TOMASULO 
 
E.O. 12958: DECL: 03/14/2018 
TAGS: ECON ENRG EPET PGOV EINV EAGR BR
SUBJECT: AMBASSADOR DISCUSSES BRAZILIAN OIL CONCESSION 
MODEL WITH DELFIM NETTO 
 
the concession model and even more unlikely that it would 
choose to change the rules on existing concessions. 
Political and economic stability have been the cornerstones 
of Brazil's policies and largely led to Brazil obtaining 
investment grade status (Ref D).  While some modification of 
exploration and concession rules may take place for these new 
"mega fields", it is doubtful the GOB would do anything to 
undermine the overall image of Brazil as a stable country in 
which to invest. 
 
¶7.  (C) Unlike Delfim Netto's view that the USG should hold 
off on intervening to establish these new rules, Brazil's 
Ministry of Mines and Energy, regulators, and US energy 
companies have suggested that it could instead be within this 
period for the USG to intervene.  Indeed, Petrobras' interest 
in consolidating deep-sea drilling in the Gulf of Mexico and 
vertical integration in the US market could open an important 
window of opportunity for the USG.  Furthermore, ANP has 
expressed interest in learning more about US small and medium 
sized energy companies operating in US states to develop a 
similar capacity in Brazil.  They have, in fact, asked for 
USG assistance to travel to the US to meet with and further 
learn about this important part of the energy equation. 
Clearly, Brazil's energy sector offers new partnerships, 
opportunities, and increased energy security for the US.  As 
Brazil begins to increase exploration of its newfound 
"pre-salt" reserves that many believe could be larger than 
the finds in the North Sea, the US could potentially 
capitalize on these new technologies to develop our own 
offshore exploration efforts.  Early engagement may be 
crucial to ensuring that US firms will have opportunities in 
this market.  END COMMENT. 
WHITE