IBP: Oil Industry Worried About Round 9 Delays

Oil and gas industry executives are worried about the negative impact of a potential delay in Brazil's 9th hydrocarbons licensing round, Joao Carlos de Luca, president of the country's oil and gas institute (IBP), told journalists in Rio de Janeiro.

"We are worried about the several delays in round 9. We already expressed our wish to the Brazilian government for round 9 to go ahead before round 8 judicial problems are cleared up," he said.

Court injunctions put a stop to last year's 8th round after initial sessions. Brazil's government has not definitively said when the 9th round will take place.

Oil companies operating in Brazil need to plan their budgets in advance, meaning the lack of information from the government could hamper investment forecasts, said de Luca.

"They [companies] need to have new exploration areas in Brazil in order to guarantee their presence in the country," de Luca said. "We need a good and robust round 9 in terms of quantity and quality of exploration areas so Brazil can attract investors."

IBP member companies are anxious for the government's decision on round 9, IBP executive secretary Alvaro Teixeira told BNamericas after the news conference.

"Companies need time to form joint bidding agreements. We also fear for the survival of Brazil's small and medium oil services companies, which cannot afford to do business in other countries," he said.

Brazil's hydrocarbons equipment and services industry is also concerned about sustaining businesses if ANP does not auction new exploration blocks.

"The oil industry needs new discoveries and if there are no more exploration rounds in Brazil, the industry could face tough times," Eloy Fernandez y Fernandez, general director of oil equipment and services industry association ONIP, told journalists.


Brazil's energy planning council CNPE postponed this week's meeting that would have covered round 9 and nuclear power plant Angra III.

Oil and gas regulator ANP needs six months to prepare for round 9 after CNPE deliberates on the meeting.

"We need direction as soon as possible," de Luca said. "We're running out of time."

The government needs to work hard not to put at risk Brazil's positive reputation for its predictability and history of respecting contracts, said de Luca.

Round 9 may face diminished demand if it takes place late this year because many corporate budgets would be fully committed by then, he added.

As a result of the urgency, mines and energy minister Silas Rondeau needs to fast-track round 9, de Luca and Fernandez y Fernandez said.

Visit BNamericas to access our real-time news reports, 10-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.