Rousseff Expands Brazil Oil Auction to Raise Up to $4.9 Billion
President Dilma Rousseff expanded by 68 percent the amount of acreage offered in Brazil’s first oil exploration auction since 2008 in a move that will help relieve pent-up demand and increase the government’s auction revenue by raising as much as 10 billion reais ($4.9 billion).
Brazil will auction 289 licenses onshore and off the coast of northeastern Brazil on May 14 and May 15, Marco Antonio Almeida, the secretary of oil and natural gas at the Energy Ministry, told reporters in Brasilia today. Brazil also plans to auction areas in the so-called pre-salt region that holds the country’s largest deposits on Nov. 28 and Nov. 29 and shale onshore gas blocks on Dec. 11 and Dec. 12, he said.
Petroleo Brasileiro SA (PETR4), the world’s biggest producer in deep waters, has discovered high-quality oil in the Ceara and Sergipe basins, where new blocks will be available. The geology along Brazil’s equator also mirrors recent discoveries near the coast of Africa.
“The announcement shows that Brazil is seeking to re- engage with investors and that there is a genuine interest in moving ahead with licensing,” T.J. Conway, a research and advisory manager at New York-based Energy Intelligence Group, said by telephone from Washington. “This licensing round will likely be the true test of the viability and potential of the Brazilian equatorial margin.”
Of the 117 additional blocks offered in the Round 11 auction, 65 are located in the Foz do Amazonas basin near the border with French Guiana, Almeida said. The other new blocks are in the basins of Espirito Santo, Pernambuco-Paraiba and Tucano Sul, he said.
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