Ministry: Brazil To Hold Next Oil-Rights Auction In 2015

Article title
Brazil expects to hold one oil-rights auction by the middle of 2015, Marco Antônio Martins Almeida, the petroleum secretary of Brazil's energy ministry, says.


RIO DE JANEIRO, March 25 (Reuters) - Brazil will hold its next oil-rights auction by the middle of 2015, a top energy official said on Tuesday, a move designed to give the government more time to draw up sale rules.

It was not stated whether the auction would be an oil rights concession auction or an auction of production-sharing rights, Marco Antônio Martins Almeida, the petroleum secretary of Brazil's energy ministry told reporters.

"Next year we will have an auction for sure, the first half at the latest," he said.

On March 13, Magda Chambriard, the head of Brazil's oil regulator, which runs all Brazilian oil auctions, said she was taking a "conservative" stance toward oil rights auctions this year, a comment taken to mean that the once annual sales would not happen in 2014.

Brazil's state-owned oil company Petroleo Brasileiro SA has also seen its ability to raise cash for auctions and new exploration activity undermined by the government's domestic fuel price controls and heavy spending to develop areas it already owns.

Under Brazilian law, production sharing auctions are held for Brazil's subsalt region, a giant offshore area where Brazil already produces about 80 percent of its petroleum and has made giant new discoveries since 2006. Winners are those groups that offer the government the biggest share of oil after development costs are covered. State-run oil company Petroleo Brasileiro SA must take a minimum 30 percent stake in all production sharing contracts and serve as operator.


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