Lobao Says Brazil Plans to Uphold Oil Contracts, O Globo Says

By Katia Cortes

Aug. 24 (Bloomberg) -- Brazil's Mines and Energy Minister Edison Lobao said the government is studying how to manage so- called pre-salt oil fields and ``has no interest in breaking contracts,'' O Globo newspaper reported.

Lobao said ``there'll be a long debate in congress'' in case the decision on how to manage the fields demands a change in legislation, O Globo reported. President Luiz Inacio Lula da Silva will ultimately determine the policy, Lobao said, according to O Globo.

Yesterday, O Globo cited the minister as saying the government may expropriate pre-salt oil wells that have been licensed to companies such as Petroleo Brasileiro SA if they find the wells are linked to others that haven't yet been auctioned.

To contact the reporter on this story: Katia Cortes in Brasilia at kcortes@bloomberg.net