(UPDATE) PETROBRAS: Transfer Of Rights Negotiation Is Still Ongoing

(RTTNews) - The Brazilian state-owned oil company Petrobras said that discussions between the firm and the government about the "transfer of rights" issue are ongoing and that there is no definition on the outcome of the negotiations.

Petrobras statement comes after "Valor Economico," a local newspaper, reporting on a deal between the company and the government in which Petrobras would receive 2 billion barrels as compensation from the Brazilian government to settle the "transfer of rights" issue.

The Brazilian government endorsed Petrobras statement, with the Finance Minister, Eduardo Guardia, stating that the "transfer of rights" negotiations are still underway.

The "transfer of rights" is a system that has given Petrobras the right to explore and produce up to 5 billion barrels of oil and gas in the Brazilian pre-salt layer in exchange for a company reimbursement to the federal government.

Contract values, however, are under review, as oil prices fell from almost US$ 100 to about US$ 50 a barrel months after the signing of the agreement, recovering to around US$ 70 barrel as of recently.

Petrobras argues that the government should pay the company to make up for the difference. Analysts say that one way the Brazilian government could solve the dispute would be to pay Petrobras with extra oil from the "transfer of rights" area.

The government, however, argues that it owes nothing to Petrobras and should receive more payments from the company.

Negotiations between Petrobras and the government are scheduled to take place until Thursday (17) but could be extended for 60 days.