UPDATE 2-Brazil leans toward oil production sharing: minister

* Govt advisers said to favor production-sharing model

* Gabrielli says model better reflects new reality (Adds comments by Petrobras chief, paragraphs 5-9)

By Denise Luna and Brian Ellsworth

RIO DE JANEIRO, May 29 (Reuters) - Brazilian government advisors "strongly support" a production-sharing model to develop massive offshore oil reserves as the country considers revamping its oil law to boost state income from new-found reserves, the energy minister said on Friday.

The administration of President Luiz Inacio Lula da Silva is seeking greater control over oil reserves discovered in 2007 deep under the ocean floor that have built up expectations for Brazil to become a major energy producer and exporter.

"We have consensus on some things. The production-sharing model is one of the proposal that is strongly supported," Edison Lobao told Reuters in Rio de Janeiro.

Under a production-sharing system, the government would own the oil but pay oil companies with part of the proceeds. Under the current system, companies buy concessions in an auction and own the rights to the oil they produce.

Jose Sergio Gabrielli, Chief Executive of Brazilian state-run oil company Petrobras (PETR4.SA)(PBR.N), said in a separate interview production sharing made sense because existing laws are no longer in line with the reality of Brazil's energy sector.

"Brazil's (energy) regulatory structure was created at a time when oil prices were very low, the country did not have access to capital markets, and the deep-water potential was not known," said Gabrielli, one of the advisors on changing the law.