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Brazilian Congress passes bill allowing large auction of pre-salt oil fields

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Christian Fernsby ▼ | September 28, 2019
The Brazilian Congress passed a constitutional amendment bill authorizing the government to hold a large auction for the concession of large pre-salt oil exploration areas.
Davi Alcolumbre
LatAm   Davi Alcolumbre
"The approval of this measure is essential for Brazil's development," said Davi Alcolumbre, president of the Senate.

Topics: Brazil congress oil

The auction, which is expected to be held in November, will help the government garner 106.5 billion Brazilian reais (25.6 billion U.S. dollars) by signing bonuses.

A third of the money is going to be paid to the state-run oil and gas giant Petrobras, and the rest will be divided among the federal, state and municipal governments, although there has not been a consensus on the shares to be distributed to each level.

Brazil's pre-salt oil reserves are located in ultra-deep waters off the coast. The discovery of those reserves, made by Petrobras in 2006, turned the country into one of the largest in pre-salt oil reserves in the world.

Production in the pre-salt areas kicked off a decade ago in Brazil. Prior to 2016, Petrobras was the operator in all consortiums exploring pre-salt fields. Since then, other companies have also joined in.