Brazil Needs Oil to Rebound to $80 to Open Prized Fields Auction

Crude prices need to recover for Brazil to advance plans to open its most sought-after fields to investors, the country’s oil regulator said.

Brent prices would have to rise to about $80 a barrel for the country to auction some of its so-called pre-salt oil deposits in 2016 or 2017, Magda Chambriard, Brazil’s chief hydrocarbons regulator, said in an interview Monday on the sidelines of the Offshore Technology Conference in Houston. Lower crude prices have changed the industry’s outlook, making companies more prudent in their expansion plans, she said.

Brazil is seeking to stimulate foreign investment after a corruption scandal and fiscal mismanagement left its national oil company Petroleo Brasileiro SA unable to fund projects, hurting the industry’s supply chain. The country plans to sell 269 blocks in an auction this year that excludes the pre-salt oil reserves, which are deposits trapped below a layer of salt in the Atlantic seabed.

That auction will take place in early October, Chambriard said in the interview, adding that regulator ANP will present a proposal to “adjust and simplify” local content rules to entice investors.

Brent rose $1.07 to $67.52 a barrel on the London-based ICE Futures Europe exchange, the highest close since Dec. 5. West Texas Intermediate, the North American benchmark crude, surged above $60 a barrel in New York for the first time since December on speculation the biggest U.S. supply glut in 85 years will ease. WTI settled at $60.40.