Brazil: A Political Impasse Stalls Energy Development

Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) Director Helder Queiroz said June 4 that the postponed 11th bidding round for exploration and production rights in oil and natural gas blocks should occur in October or November. If the oil royalties division bill currently stalled in the National Congress does not move forward before the July 15 parliamentary recess, the auction will be delayed again until 2013.

The bill most likely will not pass before July 15, given the number of issues weighing down the legislature and the government's reluctance to take a side on the matter. This gives Brazilian President Dilma Rousseff the chance to make it through the Oct. 7 municipal elections without the opposition using the politically charged oil royalties issue against her government. However, the postponement of auctions until early 2013 at the earliest (five years after the last sale) hampers the expansion of Brazil's oil and natural gas production and keeps its goal of energy independence out of reach.