Brazil's Petroleum Sector Resumes Licensing Activities

Brazil has issued its first new energy concessions since 2008. The May 14-15 11th Oil and Gas Licensing Round marked the end of a half-decade during which the exploration of newly auctioned blocks was on hold while the South American country revised the laws that govern its energy sector. While the licensing round was the country's most successful auction to date, it was only the prelude to a more important event, the Nov. 28 auction of pre-salt oil deposits under the country's new regulatory system. This auction will include four times the estimated reserves involved in the May auctions. New laws aside, growth in Brazil's energy sector will be determined by oil companies' perceptions of the new production-sharing agreement system and by Petrobras' ability to finance and carry out its ambitious and expensive expansion plans.