Brazil Min: No Subsalt Area Or 8th Round Auctions This Year

RIO DE JANEIRO (Dow Jones Newswires), Aug. 31, 2009

Brazil's government won't put subsalt exploration and production blocks up for auction this year, Mines and Energy Minister Edison Lobao said Monday.

"Definitively, there won't be any auctions in the subsalt this year. There may still be auctions of areas outside the subsalt this year by November," Lobao said.

Auctions of the so-called subsalt blocks, but under production-sharing agreements, were part of the government's proposals to change Brazil's existing oil laws, unveiled Monday. Lobao made the comments during a press conference after the laws were presented to officials in Brasilia.

The government also won't make a decision this year on restarting the suspended eighth-round auction held by the country's National Petroleum Agency in 2006, Lobao said.

The eighth-round auction was suspended in November 2006 after a local court granted an injunction stopping the sale. Before the auction was halted, 38 of the 284 oil and gas exploration and production blocks up for bid were auctioned off.

The auction drew intense interest because it included blocks close to promising subsalt oil reserves.

The subsalt oil discoveries lie under more than 2,000 meters of water and a further 5,000 meters of sand, rock and a shifting layer of salt.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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