Aug. 31 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva vowed to increase state control over the nation’s oil reserves as he prepared to unveil rules to boost exploration of an area containing the Americas’ biggest discovery since 1976.

Petroleo Brasileiro SA, the state-controlled producer, will be the sole operator of all so-called pre-salt oil fields and have a minimum 30 percent stake in all joint ventures set up to bid for licenses, according to a statement today from the company ahead of Lula’s announcement. The government may also increase its stake in Petrobras in exchange for some oil rights.

Lula is following countries from Venezuela to Russia in taking greater control over crude reserves after prices soared to a record $147.27 a barrel last year. The discovery of the Tupi field was the largest since Mexico’s Cantarell, and helped make Petrobras the world’s third most valuable oil producer. The company also said it may sell shares to finance investments.

A share sale “will discourage new investment in the stock as potential investors will wait to buy at a discount,” Jayme Alves, an analyst with Spinelli SA in Sao Paulo, said today in an interview. “It’s also bad news for the company’s existing shareholders as it will dilute the stock value.”

Petrobras shares tumbled the most since July 29 after the share sale announcement. The company, based in Rio de Janeiro, plans to spend $174.4 billion in the next five years, including more than $30 billion for the development of the offshore fields.

Government’s Proposal

Regulations for the pre-salt will strengthen Petrobras, Lula said today on his weekly radio program.

“This Monday, Aug. 31, represents a new Independence Day for Brazil,” Lula said. Brazil needs to benefit from the pre- salt discovery “writing a new regulatory framework to strengthen Petrobras, to allow the government to become the owner of the petroleum.”

Petrobras will receive $50 billion worth of oil valued at $10 per barrel from the government in exchange for shares and bonds, Senator Romero Juca said today in Brasilia.

“If a government leader announces a fixed value to these reserves, the reaction is that it is an arbitrary value, taking into consideration all the geological uncertainty in the area,” Christopher Garman, an analyst at Eurasia Group who specializes in Brazil, said today in a telephone interview. Juca’s estimate “may have been a preliminary forecast,” he said.

The government’s proposal, scheduled to be shown to state governors, mayors and other officials in Brasilia today and sent to congress, will include the creation of a new state company called Petrosal, Energy Minister Edison Lobao said today.

‘Get it Right’

Petrobras’s American depositary receipts fell $1.45, or 3.5 percent, to $40.02 in New York Stock Exchange composite trading at 10:19 a.m. New York time, the lowest intraday price since July 29.

Royal Dutch Shell Plc, Europe’s largest oil company, has put investments in oil exploration in Brazil on hold to assess the new rules for the pre-salt oil region.

It’s important that Brazil “get it right, to create a globally competitive system that attracts capital,” Marvin Odum, Shell’s director for exploration and production in the Americas, said at a news conference in Vitoria, Brazil, on Aug. 25. “A poorly designed system wouldn’t be good for Brazil.”

Lula said last week that around 71 percent of the pre-salt exploration and production licenses have yet to be auctioned.

Petrobras Chief Executive Officer Jose Sergio Gabrielli said the company’s proved oil reserves may double in the next two years as the Tupi, Iara and Whales Park fields, whose licenses have already been granted, probably hold about 14 billion barrels of crude.

Below Seabed

Brazil’s proved oil reserves totaled 12.6 billion barrels last year, according to London-based BP Plc, which ranks countries by production.

The pre-salt area runs 800 kilometers (500 miles) along the coast from Espirito Santo to Santa Catarina states and has oil deposits beneath a layer of salt resting as deep as 3,000 meters (9,843 feet) beneath the ocean surface and another 5,000 meters below the seabed.

Lula may split the rules governing pre-salt exploration and production in three or four separate bills, Lobao said.

In one bill, the government would create a social fund with revenue from the oil exploration to finance social programs and investments in science and technology, while another one would create a state company to govern oil and gas exploration and manage the resources, according to Lobao.

Petrobras Investments

A third bill would establish that rights over fields in the pre-salt and other strategic areas be shared between the government and companies that win the licenses, Lobao said. The winners will be the ones offering the biggest percentage of drilled oil to the government, according to Petrobras’s statement today.

Lula won’t change the country’s royalty rules “much,” Lobao said today, after cabinet members failed to agree on how to divide revenue between federal, state and municipal governments.

The plan may require more investments from Petrobras than it has the capacity to make, analysts said.

“Petrobras today has no means of taking on such big exploration costs because the region needs considerable investments,” Monica Araujo, head of research at brokerage Ativa Corretora in Rio de Janeiro, said. “It’s a bit worrying.”

The government will have to seek congressional approval for the bills at a time when lawmakers are probing Petrobras spending and tax policies and Senate President Jose Sarney is accused of corruption by some fellow senators.

Three of Brazil’s opposition parties said they may challenge Lula’s regulation in congress and “question the need and convenience of altering today’s law,” according to a statement released by Sergio Guerra, president of the Social Democratic Party, known as PSDB; Roberto Freire, president of Brazil’s Popular Socialist Party, known as PPS; and Rodrigo Maia, president of the Democrats, a party known as DEM.

To contact the reporter on this story: Katia Cortes in Brasilia at at kcortes@bloomberg.net; Helder Marinho in Rio de Janeiro hmarinho@bloomberg.net.

Last Updated: August 31, 2009 14:17 EDT