Brazil Petrobras CEO: Domestic Drilling Rules Could Increase

RIO DE JANEIRO (Dow Jones)--The chief executive of Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said Tuesday that he expects local regulators to increase offshore drilling regulations in the wake of the Gulf of Mexico disaster. "We can expect some increase in regulations and more requirements in Brazil," Jose Sergio Gabrielli said during a conference call with analysts. Gabrielli noted, however, that Brazil already has more stringent drilling requirements than what is in place in the Gulf of Mexico. He did not elaborate on the differences. Offshore drilling safety has come under increased scrutiny around the world after a well blowout caused a fire that sank Transocean's (RIG) Deepwater Horizon rig in the Gulf of Mexico. BP (BP, BP.LN) has struggled to stop the flow of oil from the damaged well, which has caused an oil slick that has damaged shorelines along the Gulf. Despite any likely changes in Brazil, Gabrielli said the company expects its projects to move forward without d-elays. "We are not expecting any material change," he said. Gabrielli reiterated comments made Monday about the possibility of the company taking advantage of the sudden availability of drilling rigs idled by a moratorium in the U.S. Gulf of Mexico. "We do not have a clear idea really of what is going to be the availability of new rigs," he said. "We don't know the amount of legal struggles, legal battles that are going to be happening between drillers and oil companies." Petrobras plans to build 28 rigs in coming years to help the company develop offshore oil fields, with a total of 54 rigs under contract by 2020. -By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; jeff.fick@dowjones.com (END) Dow Jones Newswires June 22, 2010 11:27 ET (15:27 GMT)