Brazil to Resume 2006 E&P Auction, Including Pre-Salt

RIO DE JANEIRO Dec 06, 2007 (Dow Jones Newswires)

Brazil won't withdraw promising pre-salt oil areas from the planned resumption of an oil and gas block auction that had been suspended last year, the Estado de S.Paulo newspaper said Thursday.

The November 2006 auction had been suspended by a judicial injunction after half a day of auctioning had passed. Blocks worth 588 million reals ($327 million) had been auctioned off, among them in the pre-salt area.

But the injunction recently was overturned, and Brazil's National Petroleum Agency, or ANP, now plans to continue the auction in March 2008, the newspaper said.

As the 2006 auction had been interrupted, but not canceled, Brazil cannot withdraw the pre-salt blocks from it as it has done ahead of a similar auction last month.

The government only weeks before the 2007 auction cut out 41 promising pre-salt blocks from it, alleging national interest.

Just before that, Brazil's state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, said that it estimated that its Tupi field in the pre-salt area contains up to 8 billion barrels of oil equivalent in reserves, making it the world's biggest oil discovery in seven years.

The government hasn't decided yet what it will do with the 41 blocks withdrawn from the 2007 auction. The auction last month even without the promising pre-salt blocks earned the government BRL2.1 billion, but foreign oil majors largely abstained from bidding amid frustration about the withdrawal of the pre-salt areas.

Copyright (c) 2007 Dow Jones & Company, Inc.

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