It was a day rich in symbolism. On an oil platform off the Brazilian coast, President Luiz Inácio Lula da Silva this month dipped his hands into the first crude to flow from promising reserves discovered in the country's waters.

The gesture - an echo of that by Getúlio Vargas, a presidential predecessor who in the 1950s created Petrobras, Brazil's state oil company - was unmistakable. But Mr Lula da Silva (pictured above right) went further: as if to confirm the political significance of his country's newly discovered offshore oil wealth, he planted an oily seal of approval on the overalls worn by Dilma Rousseff, his chief of staff and the woman widely regarded as his likely successor.

The reserves, though hard to reach, are expected to propel Brazil up the table of oil producing nations. Tony Hayward, chief executive of BP, Europe's second biggest oil company, says the new finds are "as significant as the North Sea" - which in the 1970s was one of the new frontiers that helped pull the world out of its last big oil shock.

But the find is also set to pit one of the world's most important emerging economies against both foreign equity investors and international oil companies. Many in the leftwing government seem determined to avoid sharing the coming bonanza. The future shape of the industry may be decided by short-term political imperatives ahead of presidential elections due in 2010.

Petrobras, a world leader in deep-sea exploration, is seen by many observers as ideally placed to lead the task of tapping what are some of the most inaccessible oilfields on earth. But the government has other plans. On September 19, an inter-ministerial commission is due to present its recommendations on the future structure of Brazil's oil sector. The shortest odds are on the creation - recently backed publicly by Mr Lula da Silva - of a new national oil company, 100 per cent under government control, to take ownership of the new reserves and develop them in partnership with Petrobras and others.

While Petrobras is controlled by the Brazilian state through a majority of its voting stock, most of its capital is in non-voting shares. Some 60 per cent of total capital is held by minority - mostly foreign - shareholders. It is they who would lose the opportunity to benefit from exploiting the offshore discoveries.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

It is hard to be precise about the size of the new finds, known as the "pre-salt" fields because they are trapped beneath a layer of salt. The one field that has been measured with any accuracy contains 5bn-8bn barrels - as much as the remaining reserves of Norway. Ministers are working on the assumption that there is 10 times that amount waiting to be found.

If so, international oil companies may be locked out of one of the biggest parties of the industry for some time. That is bad news when these companies are failing to replace used reserves with new discoveries. Petrobras and others are likely to be offered the chance to participate through service contracts - in which companies are paid to bring up the oil and gas but have no commercial rights over it - or production sharing agreements, in which they are given some of the oil they produce to cover costs and some as profit but have limited control over how much they may produce and when. What seems almost certain is that the current concessions system, in place since 1997, will change.

The notion has caused a political storm in Brazil, where many politicians who usually support the government have been alarmed by the proposals being floated by the president and senior ministers. "An assault on Petrobras's minority shareholders," is how Francisco Dornelles, a pro-government senator, describes the idea of the new company. The reserves already belong to the people and the idea that they must be reclaimed "is devoid of any meaning, confuses public opinion and serves only for electoral purposes", declares Sérgio Guerra, a senator in the opposition centrist PSDB, which introduced the 1997 law.

The dissatisfaction is shared at Petrobras itself. Just as years of investment and accumulated expertise are set to pay off in spectacular fashion, the company's domination of the industry it helped to create has been put in jeopardy. Sérgio Gabrielli, chief executive, (pictured above with Mr Lula da Silva) says Petrobras can take on the task and describes talks with the government as heated. The company's strategic plan for 2008-12 includes investments of more than $112bn, of which just $8bn must be financed. The plan was drawn up on the basis of oil at $35 a barrel and before the discovery of the new fields - a revised plan is due to be announced this month. Mr Gabrielli says that with much higher oil prices and with new discoveries adding to reserves, Petrobras will be in a much stronger position. "We think we can develop the pre-salt fields on our own," he adds, although modifying the assertion by saying: "Perhaps not 100 per cent, as we don't know 100 per cent of what is there."

Though they will be squeezed and may even lose pre-emption rights, international oil companies will be needed to handle technical challenges such as high levels of carbon dioxide in the offshore discoveries, an issue on which they say Petrobras is seeking their advice. Yet Brazil has already floated the idea of modifying existing contracts, albeit as one of several possibilities.

It seems strange to be keeping investors at arm's length at a time when a worldwide shortage of rigs and other gear is forcing up costs across the industry - let alone in cases as complex as the pre-salt fields. "For every new project, costs are escalating exponentially," says Michelle Billig of Pira Energy, a New York consultancy. "That puts a limit on the volume that can simultaneously be brought online, regardless of the reserve base."

Under the concessions model introduced in 1997, oil companies buy rights to explore geographical blocks of Brazilian territory, on land or at sea. Petrobras - usually but not always as leader - has formed consortia with several international oil companies to buy concessions. Concession holders accept the risk of finding no oil, make the necessary investments and are rewarded with rights over whatever is discovered. They pay royalties to the government on what they produce.

The risk of not finding oil in the pre-salt fields appears slim. Of 16 probes sunk so far, all have found oil. That 100 per cent success rate compares with the 10-15 per cent typical of new areas in Brazil, according to Nilo Azambuja, a former Petrobras executive now working at High Resolution Technology, a geology and geochemistry service provider.

While the operational risks involved are still considerable, industry executives agree that the reduced risk of finding no oil at all leaves room to change the concession rules. Brazil's oil industry regulator is among those who favour keeping the existing regime but demanding higher prices for concessions and charging companies bigger royalties. This would ensure that Brazilians gained from their new-found wealth while causing minimal disruption and attracting investment.

But Mr Lula da Silva seems determined to create a wholly state company modelled on Norway's Petoro. Brazil has begun talks with Norway about how it managed its oil and gas discoveries in the North Sea.

People close to the talks say the stake that Brazil's version of Petoro gained in each project would be limited by the fact that it will also have to invest and pay its share of the costs just like other partners. A senior executive of one national oil company says: "If Norway is any guide, having a new partnership of that nature in the future would not be a reason to be scared."

Brazilian critics are less confident. "It just doesn't make sense," says Adriano Pires, an oil industry consultant in Rio de Janeiro. Petrobras has been able to invest and grow precisely because it has private shareholders, he says. "Where will the new company get money for investment?"

João Augusto de Castro Neves, a political scientist in Brasília, says he believes Mr Lula da Silva has spied in the new company a means of securing the election of Ms Rousseff when he stands down after two consecutive terms at the end of 2010. Success would depend on parliamentary support not only from the president's socialist PT but also the catch-all PMDB, an agglomeration of regional interests that makes no secret of demanding government jobs in exchange for its support. A new oil company - immensely powerful and commanding a giant budget - is just the kind of entity both parties would love to gain command of, Mr Castro Neves says.

In arguing for different treatment of the new reserves, Mr Lula da Silva has revived an old nationalist slogan popular when Petrobras was created more than 50 years ago: O petróleo é nosso - "the oil is ours".

That prompted a sharp rebuke from Antonio Palocci, formerly his finance minister. The biggest challenge, Mr Palocci said, would be to attract the necessary investment. "Either we make this investment possible," he warned, "or we will be saying, 'the oil is ours - ours down there under the ground'."