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Brazil: Senate Approves Bill Paving the Way for Offshore Oil Auction

1 MIN READOct 16, 2019 | 18:53 GMT

What Happened: The Brazilian Senate has approved a deal between the government and state-owned energy company Petroleo Brasileiro (Petrobras) to divide the proceeds from a Nov. 6 auction covering the so-called transfer of rights area off the Brazilian coast, Reuters reported Oct. 15. Under the deal, Petrobras will receive 5 billion barrels of oil reserves, while the remaining 6 billion to 15 billion barrels will be auctioned off.

Why It Matters: The agreement stipulates that the Brazilian government will receive 67 percent of the revenue from the upcoming auction, while 15 percent will go toward the states and 3 percent toward the state of Rio de Janeiro. Fourteen international oil companies have received approval to participate in the massive auction, according to Brazilian authorities.

Background: The Brazilian government is looking to extract a combined signing bonus of up to $25.8 billion from the winners of the bidding round.

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