Brazil Delays 5th E&P Licensing Round

According to Mauricio Tolmasquim, Secretary of Mines and Energy, Brazil's 5th exploration licensing round has been postponed until the second half of 2003. The tender was originally scheduled for June.

The postponement came as the government seeks to increase the local content level for exploration and production, and it studies possible tax benefits to attract investors. "The delay is small and won't cause problems for investors," Tolmasquim said at the Latin Oil and Gas seminar in Rio de Janeiro.

The ANP will announce the new schedule for the licensing round later in this month. Investors will have until July to register their participation with auction fees during the first half of August.

One reason for the delay was the government's decision to increase local equipment content in oil exploration and production, he said. Petrobras is already doing this for its oil platform construction tenders. Companies that propose using greater local content will have an advantage in the auction. The government is also studying tax benefits, including a tax waiver on temporary imports, to attract investors, he added.

"We don't know if it will continue but it's being discussed," Tolmasquim said. In the 5th round, ANP will auction 1,122 oil and gas exploration and production blocks in nine sedimentary basins covering a total area of 195,216 square kilometers.