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Breaking News:

Oil Climbs On Major Crude Draw

Brazil’s Huge $25 Billion Oil Auction Clears Very Important Hurdle

Brazil’s massive transfer-of-rights oil auction to be held on November 7 has cleared one hurdle as the Brazilian Congress approved on Thursday one section of a larger bill that determines the specifics of the $25 billion auction, Reuters reported. The remaining sections of the bill still need to be settled.

The one section that was approved today deals with revenue sharing for the auction proceeds, but remaining elements of the bill will still need to be approved—for now the elements in the unapproved sections have yet to be agreed.

The section that was approved will now become law.

Brazil’s auction is expected to rake in 106 billion reais, or $25.5 billion for the government.

The auction will seek to sell oil blocks in the presalt zone off the coast of Brazil that had originally been given to state-run Petrobras to take 5 billion barrels of oil from those fields. Now, international oil companies will be able to bid on the production rigs in this same area.

Petrobras has already done a fair bit of exploring in the area, and Brazil is hoping that this will factor into getting a premium price for the transfer of rights in that acreage.

Petrobras made it clear on Thursday in its updated strategic plan that it is committed to deepwater oil and gas projects, shedding its earlier persona as an energy company that would “evolve with society” through solar and wind projects as part of its Business and Management Plan. Petrobras Chief Executive Roberto Castello Branco has called other oil majors who are planning to diversify into renewables as mere “marketing ploys” Reuters reported.

Brazil is home to billions in oil reserves, about 90% of which lie offshore in deep waters.  

By Julianne Geiger for Oilprice.com

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