(Mis)Government Temer may sell pre-salt oil below market price.
Pré-sal Petróleo SA (PPSA), a state-owned company created by the government to manage the pre-salt oil fields, will once again attempt to sell oil contracts belonging to the Brazilian government; this time, however, the company will open the possibility of selling below the reference price if no interested parties are willing to pay the proposed amounts.
247 - Pré-sal Petróleo SA (PPSA), a state-owned company created by the government to manage the pre-salt oil fields, will once again attempt to sell oil contracts belonging to the Brazilian government. This time, however, the company will open the possibility of selling below the reference price if no interested parties are willing to pay the proposed amounts.
"This will be the second auction held by the company. In the first one, in May, only the Anglo-Dutch company Shell showed interest. On the day of the offer, however, the company did not submit any bids." PPSA is responsible for selling volumes of oil to which the Brazilian government is entitled in pre-salt fields, according to the law that changed the sector's rules, sanctioned by then-President Lula in 2010. In the August auction, there will be three lots totaling 3 million barrels, from the Lula, Sapinhoá, and Mero fields, all operated by Petrobras in the Santos Basin. The government expects to raise R$ 1 billion by the end of the year from the sale of this oil.
In Lula and Sapinhoá, the Union has a right to the oil because part of the reserves are outside the concession area. Mero is a production sharing contract, in which the government is entitled to 41,65% of the volume produced. The auctions are based on the reference price established by the ANP (National Agency of Petroleum, Natural Gas and Biofuels) for each field. The price is changed monthly, according to the evolution of international prices.