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Brazil plans to auction new oil exploration and production rights, but no auction is likely this year, an official with Brazil's mines and energy ministry told Reuters.
"This year is very unlikely," said Marco Antonio Martins de Almeida, the ministry's oil, natural gas and renewable fuels secretary. "We need four months to arrange an auction and we are already in August. Or in other words, we are at the limit."
Brazil, which held annual auctions for a decade starting in 1999, has not sold new rights since 2008, when it moved to increase government power over energy after giant offshore discoveries south of Rio de Janeiro. Since then, only state-led Petrobras has been able to buy new rights, which it did as part of a more than $50 billion stock-for-oil swap with Brazil's government in September 2010. The swap was part of an $80 billion share sale, the largest sale of stock in history. The lack of auctions has made it difficult for foreign and independent Brazilian oil companies to win new rights and guarantee long-term exploration and production investments in the country.
Brazil's oil and gas industry will spend $45 billion in 2012, Maria das Graças Foster, chief executive of state-led Petrobras, the largest Brazilian energy company, told reporters. Petrobras, which plans to invest $237 billion in the 2012-2016 period, will do the bulk of the spending, though companies such as OGX Petroleo e Gas SA, Royal Dutch Shell Plc, Repsol SA and BP Plc also expect to spend on expansion of Brazilian operations.
Under its 2012-2016 plan, Petrobras is expected to spend an average of $47 billion a year, or about $130 million a day, to expand output and operations. The plan is the world's largest corporate spending program. The company, though, has been having trouble controlling costs and completing projects on time and is expected to spend less than the average this year.
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