Brazil Calls Oil Auction, Seeks to Export Oil in a Year

Brazil's government will seek to sell 14.4 million barrels of oil cargo this month, while the state company managing the development of the pre-salt oil exploration aims to export its own oil in a year's time, the firm's head said on Thursday.

The tender of oil cargo, at an auction set for Aug. 31, follows a failed auction in May, in which the government received no bids.

On offer is the government's share of production from companies producing in deepwater pre-salt fields. Brazilian rules dictate that companies vying for stakes in the prolific pre-salt must offer a share of oil production to the government.

Oil majors have spent heavily on recent oil auctions in Brazil, Latin America's top producer, to lock in access to the pre-salt layer, where billions of barrels of oil are trapped under a thick layer of salt beneath the ocean floor.

While Brazil needs to sell its own share of the oil to companies currently, state-run Pre-Sal Petroleo SA (PPSA) hopes to become an oil exporter in its own right in about a year, Chief Executive Ibsen Flores told Reuters in an interview.

Of the 14.4 million barrels on offer this month, 10.6 million barrels will come from the Mero field, while 600,000 will come from Sapinhoa field. Another 3.2 million barrels will come from the Lula field. All fields are located in the Santos offshore basin. Each lot will be offered individually.

The failed May auction came after a new law barred the sale of the government's oil below reference prices set by oil regulator ANP.

Royal Dutch Shell Plc, which has stakes in all three offshore fields from which the oil at auction was produced, was the only company registered to participate in the May auction.

So far, the government has sold three cargoes of oil, all this year, including two cargoes of 500,000 barrels and one of 250,000 barrels, in addition to a natural gas contract of 230,000 cubic meters per day. State-controlled oil company Petroleo Brasileiro SA bought them all.

Reporting by Marta Nogueira