Pre-Salt Mega Auction Will Need Congress Approval

The Federal Government Delivered on Monday, May 6th to the Court of Accounts of the Union (TCU) the Technical Documents that are Part of the Process for the Mega Auction of Pre-Salt Oil – Union Agreement with Petrobras Scheduled for October That Could Yield R$ 106 Billion.

The Complete Documents Regarding the Agreement Between the Union and Petrobras on the Bidding for Oil Wells Scheduled to Take Place on October 28th Were Delivered on Monday, May 6th to the Court of Accounts of the Union (TCU) by Ministers Paulo Guedes (Economy) and Bento Albuquerque (Mines and Energy) to the President of the TCU, José Múcio Monteiro.

The onerous assignment auction that could yield R$ 106.5 billion cannot be held without authorization from Congress; therefore, the Union also cannot make payments to Petrobras. This decision is from TCU Minister Bruno Dantas, the rapporteur on the matter in the agency. The agreement between the Union and Petrobras provides for a reimbursement of around US$ 9 billion to the state-owned company.

The amount will be paid after the sale of the pre-salt fields governed by the onerous assignment contract. However, for Dantas, it is unclear how this payment will be made to the oil company, necessitating legislative authorization for the reimbursement to be carried out.

For Albuquerque, it is not necessary to approve a bill for the auction to take place, only a “green light” from the Union. The government is eager to resolve the bidding obstacles, as it needs to present the auction notice to interested parties with a 100-day advance. This means that the federal government expects to receive TCU approval by mid-June.

Understand the Mega Auction

In 2010, the Union and Petrobras signed an agreement that, due to a lack of resources at the time to invest in pre-salt exploration, exclusively ceded to the state-owned company oil wells in five fields, in exchange for not diluting the Union’s equity interest in the oil company. The contract set a limit of 5 billion barrels, but soon after, a capacity of 12 billion barrels was discovered. This excess of 7 billion is precisely what the government aims to auction on October 28th.

According to a resolution published in the “Official Gazette of the Union” last month, the areas of Atapu, Búzios, Itapu, and Sépia in the Santos Basin will be offered. According to the published resolution, the signing bonus amounts will be: Atapu: R$ 13.7 billion; Búzios: R$ 68.1 billion; Itapu: R$ 1.7 billion; Sépia: R$ 22.8 billion.

The Fancap, the union of workers in Uruguay, threatened to cut off fuel supply to Petrobras stations in Uruguay and fuel supplies to the airport on Monday, May 6th.