Judge Suspends Brazil's Oil and Gas Block Auction

RIO DE JANEIRO, Nov 28, 2006 (Dow Jones Newswires)

A federal judge in Brasilia on Tuesday afternoon issued an injunction suspending Brazil's annual oil and gas exploration and production auction.

Brazil's National Petroleum Agency, or ANP, said it immediately appealed the decision, trying to overturn it. Yet, as the injunction wasn't overturned as of 1900 GMT Tuesday, the ANP decided to stop the auction completely for the day.

The agency said it is optimistic it will be able to continue the auction Wednesday, starting at 1100 GMT, an ANP official said.

The injunction is another twist in the judicial battle around the oil and gas auction.

On Monday, a federal judge in Rio de Janeiro had issued an order suspending a rule that put a limit to the number of bids each company is allowed to place at the auction. But that order was temporarily suspended Monday night.

Brazil's state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, as well as foreign oil firms such as Italian oil company Eni SpA (ENI.MI), made winning bids for promising offshore oil blocks worth hundreds of millions of dollars Tuesday morning.

It was unclear whether the bids would still be valid if the auction were to remain suspended.

Copyright (c) 2006 Dow Jones & Company, Inc.

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