Brazil Likely to Hold 11th Oil Concession Round in '09
RIO DE JANEIRO (Dow Jones Newswires), Apr. 3, 2009
Brazil's National Petroleum Agency will likely hold an 11th-round auction of oil and gas exploration and production concessions this year, the acting mines and energy minister told local business daily Valor Economico Friday.
The 11th-round auction, however, probably won't include any offshore E&P blocks, including those located in the much-anticipated subsalt regions, Mines and Energy Executive Secretary Marcio Zimmerman told Valor. Zimmerman is acting head of the Mines and Energy Ministry while Minister Edison Lobao is traveling.
"I believe that, given the logic of the auction, this year will again move more toward areas outside the subsalt (region)," Zimmerman said.
The agency, known as the ANP, will likely auction off onshore E&P concessions and so-called "new frontier" areas, much like the 10th-round auction held in December, Zimmerman said. Despite not having included any offshore blocks, that auction generated 89 million Brazilian reals ($40.5 million) in revenue, and 54 of the 130 blocks on offer received bids.
The Brazilian government removed offshore blocks that included possible subsalt deposits after state-run energy giant Petroleo Brasileiro announced the discovery of its Tupi field in November 2007. The field is estimated to hold between 5 billion and 8 billion barrels of oil equivalent, or BOE.
According to Zimmerman, the return of the highly sought subsalt E&P blocks to auction likely won't occur until a government study group completes its proposals for possible changes to Brazil's oil laws.
The proposals are expected to give Brazil's government a greater stake in oil and natural gas production, especially in the subsalt area. Government officials, however, have said that previous contracts would be maintained.
Under consideration is the creation of a second state oil company that would manage development of the reserves, as well as production-sharing agreements such as those used in Norway.
Copyright (c) 2009 Dow Jones & Company, Inc.
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