Brazil, US CEOs discuss cooperation in Oil, Tax Reform


Brazil, US CEOs discuss cooperation in Oil, Tax Reform

BRASILIA – United States corporations keen to invest in Brazil oil production could help develop nonconventional gas and oil fields in the country, said CEOs of American and Brazilian companies at the United States-Brazil CEO Forum.

The South American country is expected to auction its first blocks of shale gas later this year, and United States developed technology, such as hydraulic fracking and horizontal drilling, could be needed in the process, said Josue Christiano Gomes da Silva, a textile executive who co-headed the eighth annual conference, in which American and Brazilian executives meet to provide recommendations to the American and Brazilian governments on trade and other issues.

Mr. da Silva said even though Brazil lacks a sizable pipeline network to deliver the potential energy findings, the country's power-distribution grid is vast enough to make good use of shale gas.

The chairman and CEO of Coteminas, was speaking as co-chairman of the CEO Forum, which brought together government and corporate leaders in Brazil's capital to discuss such issues as tax reforms and visa waivers.

Brazil has been trying to attract investment, mostly in infrastructure, and increase productivity, as it struggles to tame inflation and spur growth after a dismal performance in both fronts last year.

"A lot of investment in productivity needs to take place" in the country, said International Paper Co. CEO John Faraci, who co-chaired this year's event. Although Brazil has announced large oil finds in very deep waters off its coast in the last few years, nothing significant has happened in terms of shale gas and oil.

Mr. da Silva said the countries could cooperate in biofuels as well.

The forum also generated a memorandum in which the participants agreed to move toward eliminating double-taxation between the two countries, as cross-investment between Brazil and the United States becomes more level. Also speaking at the conference was Brazil's VP Michel Temer, who said there are eight United States corporations investing in Brazil for each Brazilian firm investing in the United States --a ratio that he noted in the past was 40-to-one.

The increased Brazilian investment overseas could be a good reason for the double-taxation agreement to go ahead, Mr. da Silva said.

Tax reform, in general, is seen as an important step for Brazil to unleash economic growth.

The CEOs showed optimism that tourist visas soon will be waived for travelers between the two nations and announced a pilot program to get Brazilian frequent travelers to the United States into the American global entry program. This would allow some Brazilians to get into a United States-controlled data bank that speeds up security clearance at American airports.

Dow Jones Newswires

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