Brazil Energy Secretary: Time Running Out for Auction of Oil Exploration

RIO DE JANEIRO - Brazil's 11th auction of oil exploration areas is being held up by a debate among lawmakers about how to distribute royalties, an official with the Mines and Energy Ministry said Monday.

"The question over royalties needs to be resolved first," said Marco Antonio Almeida, secretary of oil, natural gas and biofuels at the Mines and Energy Ministry.

President Dilma Rousseff has declined to approve the 11th bid round until lawmakers resolve the dispute over how to divide royalties from the country's oil production. The last bid round was held in 2008.

Oil companies in Brazil have expressed concerns over the lack of oil concession auctions, which could cause a negative effect on much-needed investments in the sector.

"The area under exploration in Brazil is decreasing," Mr. Almeida said. "We need to put these new blocks into the market."

Mr. Almeida said he hoped the next bid round as well as the first auction of pre-salt fields under new production-sharing agreements would happen "in the quickest way possible."

Time, however, is running out for 2012, Mr. Almeida said. Brazil's National Petroleum Agency needs about four months to hold an auction after it is approved by President Rousseff, he said.

Copyright (c) 2013 Dow Jones & Company, Inc.

WHAT DO YOU THINK?

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.