Brazilian President Luis Inacio Lula daSilva will unveil a sweeping reform of the country’s oil and natural gas industries today. The proposal is expected to introduce a new regulatory framework for the exploration and development of recently discovered offshore oil deposits in Brazil’s pre-salt fairway. This so-called “pre-salt” area, below a thick layer of salt formations and more than 13,000 feet below the sea bed, is estimated to hold as much as 50 billion barrels of oil and is the deepest oil reservoir Brazil has found (thus far, its oil discoveries have all been post-salt, or above the salt layer). The legislation will delineate exactly who may operate in the still-unleased blocks in the pre-salt area. Government-run Petrobras will likely be given rights to operate in the region, plus a minimum ownership stake of about 30 percent in each block. A new state-controlled company, Petrosal, will be created to manage the new assets and determine how royalties from the deposits will be distributed. The legislation is not, however, expected to change the existing legal framework for exploration and development outside the pre-salt area. “The government has proposed a model that may complicate an already successful system,” said Andrew Derman of Thomson & Knight, which represents many oil and natural gas companies that operate in Brazil. “However, the oil and gas industry successfully works in a variety of contractual systems worldwide and will adapt to the regulatory environment.” The reforms are a part of President daSilva’s effort to use the new found oil wealth to ease poverty and improve education and technology in Brazil, but a quick passage of the legislation is unlikely. “The proposed legislation will receive a great deal of Congressional scrutiny and the ensuring debate could be protracted,” explained Alexandre Chequer, also of Thomson and Knight.
In Sunday’s elections, a record high turnout of Japanese voters overwhelmingly elected the main opposition party, the Democratic Party of Japan (DPJ), ending nearly 45 years of rule by the Liberal Democratic Party (LDP). In a dramatic reversal, the DPJ opposition increased its seats in the Lower House from 112 to 308, while the LDP lost 181 of its previous 300 seats. (Upper House elections take place in July and an election for Prime Minister in September.) Some consider the vote primarily a response to domestic Japanese economic trends. The ruling LDP commanded a strong reputation of developing the Japanese economy after World War II, but the economy weakened during the recession of the 1990s and that weakness has continued into the present global economic slowdown. The result has been high unemployment, falling wages, and a public debt nearing 200% of GDP. Japan’s foreign policy under the DPJ is uncertain. Chinese officials, still nursing deep resentments over Japan’s invasion of China and other Asian countries between 1937 and 1945 that has isolated Japan within its own region, await a formal apology from the Japanese government before pursuing closer relations. The DPJ may is also likely to reevaluate the LDP’s strong ties with the United States–particularly whether to evict 50,000 Americans from a U.S. military base at Okinawa.
For more on Japan’s political struggles, see Why Japan Can’t Lead by Aurelia George Mulgan (World Policy Journal, Summer 2009).
NASA has launched the U.S. shuttle Discovery to the International Space Station, carrying food and equipment to the orbital outpost in its 30th maintenance flight. After nearly two full days of traveling, it arrived at the ISS on Sunday night with more than seven tons of gear to unload, including a freezer to store research samples, a new sleeping compartment, and a treadmill (named after television personality Stephen Colbert) to maintain the astronauts’ health. “The entire rendezvous and docking was smooth as silk,” said NASA mission commentator Rob Navias. The mission also includes three spacewalks to prepare the space station for full-time science operations. The first, scheduled for Tuesday, will be to retrieve several experiments to be brought back to earth for analysis, as well as to install a new tank of ammonia coolant. Discovery will spend a total of 13 days in space and is due to return to the Kennedy Space Center in Florida on Sept. 10.
Nearly 60 percent of black and African people living in the Russian capital of Moscow have been victims of racially motivated violence, says a new study published by the Moscow Protestant Chaplaincy (MPC), an interdenominational Christian congregation ministering to Moscow’s foreign communities. According to the report, Africans living or working in the city are essentially “under siege,” living in constant fear of attack and avoiding crowded places and public transportation. Of the 200 people surveyed, about a quarter said they had been attacked multiple times, and some 80 percent had experienced verbal abuse. The number of assaults actually decreased since the MPC’s last survey in 2002, but many of the attacks remain premeditated and extremely violent. One Nigerian man interviewed by the BBC said he was shot after having been stabbed multiple times in the back, and another man claimed an attacker tried to remove his scalp. At least one dozen immigrants have been killed and hundreds more injured in racially driven attacks this year alone. Meanwhile, Joachim Crima, a 37-year-old native of Guinea-Bissau aiming to become Russia’s first black elected official, may have competition from a builder of Ghanian descent. Crima, who is running for district chief in the Russian region of Volograd, has been dubbed the “Volgograd Obama” by media outlets and is the first black person to ever be a candidate for office in Russia. His newest competitor, Filipp Kondratyev, whose father is from Ghana and whose mother is Russian, registered last week for the October 11 polls. Kondratyev’s spokesman denied that his candidacy was put forth in an effort to take votes away from Crima.
North Korea’s efforts to restructure its foreign trade provoked conflicting international responses as it opened its border with South Korea but was caught shipping banned weapons to Iran. South Korea announced that regular traffic of goods and personnel will resume on Tuesday across a heavily fortified stretch of the border that the North had closed in December–the latest in a recent series of conciliatory gestures from North Korea to both South Korea and the United States. Meanwhile, the Financial Times reports that the United Arab Emirates has seized a ship carrying munitions, detonators, explosives and rocket-propelled grenades—all embargoed by the United Nations, and disguised as oil—manufactured in North Korea and en route to Iran. The United Nations has imposed heavy sanctions on both Iran and North Korea, though the U.N. has not yet commented publicly on the weapons seizure. The seizure is also a positive signal from the U.A.E., an import-export hub for Iran and several other Middle East nations, which has been accused of allowing questionable shipments to transit through its ports.