RIO DE JANEIRO, Nov 6 — Brazil is auctioning drilling rights to four deep-sea oil fields today, which it hopes will raise more than US$26 billion (RM107.6 billion) and turn the country into one of the world’s top producers.
A dozen oil majors are bidding for the blocks that are estimated to contain as much as 15 billion barrels of oil — nearly double the size of Norway’s reserves.
The so-called pre-salt deposits are trapped beneath the ocean floor off Brazil’s southeast coast.
“It’s a historic day for Brazil’s oil sector,” said Decio Oddone, head of the National Petroleum Agency, as the sale in Rio de Janeiro got under way.
The highly-anticipated auction — Brazil’s biggest ever — comes after President Jair Bolsonaro’s recent push in Saudi Arabia for the Latin American country to be included in the Opec oil producing cartel.
The government hopes the sale could turn the country into the world’s fifth largest producer in the next 10 years.
It ranked ninth in 2018, according to the US Energy Information Administration.
Brazil’s state-owned oil giant Petrobras is among the bidders that also include ExxonMobil, Shell and China’s CNOOC.
Unlike previous oil field sales, the areas up for grabs have already been explored by Petrobras, reducing the risk for buyers.
Prices are fixed and the winners will be companies offering the largest cut of oil to the government.
Petrobras has said it plans to exercise its preferential rights for two of the four blocks. It is expected to partner with foreign explorers.
If the rights to the four areas are sold, it will raise 106 billion reais, or more than US$26 billion.
The huge windfall would be a boon to Bolsonaro’s far-right government as it struggles to revive economic growth, reduce unemployment and pay down a crippling debt burden.
Environmental activists held a protest outside the luxury hotel in Rio where the auction was being held.
The sale comes as Brazil battles to contain a massive oil spill off its northeast coast, which has affected hundreds of beaches. — AFP
