Brazil to Announce New Oil Auction

The Brazilian government will seek to raise as much as 2.5 billion reais ($850 million) with its 13th-round auction of oil and natural gas exploration rights in October, newspaper Valor Econômico said on Wednesday.

Terms of the plan will be outlined by Mines and Energy Minister Eduardo Braga next week at an international conference in Houston, Valor added. Braga told the paper that projections for the bidding round are based on a price of $65 for crude oil.

The newspaper said that between 270 and 290 blocks, none in the oil-rich subsalt fields, could be included in the bidding round. The government had planned to hold the auction in early May, but pushed the date back at the recommendation of the ANP, the oil regulator that handles the auctions.

Money from the sale of new exploration rights could help President Dilma Rousseff's government meet its budget target for 2015, a key step to restore credibility with financial markets. The plan should also bolster Brazil's battered oil industry, severely hit by a massive corruption scandal at state-run oil producer Petróleo Brasileiro SA.

Valor also said, without saying how it obtained the information, that the government is considering delaying the auction of new exploration rights for the subsalt region until 2017, instead of 2016 previously. A delay could help Petrobras, as the company is known, buy time to recover from the impact of the scandal, which curtailed its access to financing, Valor said.

The subsalt region refers to vast offshore oil deposits lying under layers of salt embedded in the seabed.

No immediate response was available from the Energy and Mines Ministry for comment on the Valor article.

Reporting by Silvio Cascione