Brazilian Federal Court overturns injunction that suspended auction, and pre-salt oil reserves begin to be given away.
The Federal Regional Court of the 1st Region this morning overturned the injunction that suspended the pre-salt auctions scheduled for this Friday, the court reported; with the favorable decision of the TRF, the auction, in reality a donation of the largest oil reserves discovered today, has already begun; in total, 16 oil companies are registered to participate - 10 are competing in the 2nd Round and 14 in the 3rd Round; it is the first time that private oil companies will compete alone in a pre-salt auction, without the Sharing regime; if all blocks are sold, Michel Temer's government will raise R$ 7,75 billion, which will cause each liter of oil to be sold for R$ 0,01, according to a study by FUP; the loss to the country could exceed R$ 500 billion in revenue.
247 - The Federal Regional Court of the 1st Region this morning overturned the injunction that suspended the pre-salt auctions scheduled for this Friday, the court reported; with the favorable decision from the TRF, the auction, which is actually a donation of the largest oil reserves discovered today, has already begun.
In total, 16 oil companies are registered to participate - 10 are competing in the 2nd Round and 14 in the 3rd Round. This is the first time that private oil companies will compete alone in a pre-salt auction, without the Production Sharing regime; if all blocks are sold, Michel Temer's government will collect R$ 7,75 billion in bonuses.
However, the loss to the country could exceed R$ 500 billion in revenue, according to a study by the Unified Federation of Oil Workers (FUP).read more).
Read below a report from Agência Brasil on the subject:
The president of the Federal Regional Court of the 1st Region (TRF1), judge Hilton José Gomes de Queiroz, overturned the injunction issued by judge Ricardo de Sales, of the 3rd Federal Civil Court of Amazonas, to suspend the auctions for the sharing of pre-salt blocks, scheduled for today (27), in Rio de Janeiro. The information comes from the Attorney General's Office (AGU), which had filed an appeal against the injunction earlier in the morning.
The second and third rounds of production-sharing auctions are taking place four years after the first auction, involving the Libra area, and this is the first one that will not feature Petrobras as the sole operator. According to Law 12.351/2010, Petrobras should have been the sole operator of the pre-salt fields, but a 2016 law ended this requirement. It is expected that eight blocks will be auctioned for the exploration and production of oil and natural gas.
The injunction had been granted in response to a request from the Oil Workers Union of Amazonas, which questioned changes to the law that stipulated Petrobras as the sole operator of the pre-salt fields, with a stake of at least 30%.
With new rules and flexibilities, today's auction, scheduled to begin at 9 am at the Grand Hyatt Hotel in Barra da Tijuca, attracted the attention of the world's oil giants, and the expectation is to generate billions of dollars in investments for the country. Among the 16 companies qualified by the ANP (National Agency of Petroleum, Natural Gas and Biofuels) to participate in the two rounds of the auction are the American companies Exxon/Mobil and Chevron, the Spanish company Repsol, the British company Shell, the French company Total, the Norwegian company Statoil, and the Chinese companies Cnooc and CNPC.