Spanish oil group Repsol expects to invest $12 billion in oil exploration activities in Brazil in the next 10 years, including in newly discovered subsalt areas, its president said on Saturday.

For the next three to four years it's just exploration. When we get to developing the fields we will need billions of dollars, Antonio Brufau told reporters in Rio de Janeiro after meeting Jose Sergio Gabrielli, the president of Brazilian state oil firm Petrobras.

Repsol is a partner in the Guara and Carioca subsalt fields, both operated by Petrobras. Brufau said Repsol's 2010 Brazil investment would be between $380-400 million, and the company might take part in auctions for other subsalt fields.

For new concessions, we'll have to evaluate thoroughly the new contracts, the new taxes to see whether a company the size of Repsol will be interested, he said.

President Luiz Inacio Lula da Silva in late August proposed a legislative framework to develop huge reserves under a deep layer of ocean salt that could transform Brazil into one of the world's leading petroleum exporters.

The bills, which would make Petrobras the sole operator of new subsalt oil fields, are making their way through Congress.

Brufau said it would be difficult for Repsol to expand its refinery investment in Brazil because of Petrobras' dominant position.

We prefer Spain, Peru and Argentina where we are integrated with the distribution, he said. Repsol has a partnership with Petrobras in a refinery in the southern state of Rio Grande do Sul and Brufau said he discussed the project's future with Gabrielli.

We're talking about the possibility of investment, whether it will be solely Petrobras, solely Repsol or both companies under different conditions, he said.

(Writing by Stuart Grudgings, editing by Alan Elsner)