Chamber authorizes oil auction to increase government revenue.
The same text allows for the application of resources from the Social Fund – formed with pre-salt resources – to social housing projects.
By Marcela Ayres
(Reuters) The Chamber of Deputies approved on Wednesday a provisional measure that allows the government to auction off its share of oil in uncontracted areas of the offshore pre-salt layer, in an attempt to increase revenue amid difficulties in balancing the budget.
The same text allows for the application of resources from the Social Fund -- formed with pre-salt resources -- to social housing projects.
The government had sent a separate bill on the subject related to the auction, but its content was incorporated by Congressman José Priante (MDB-PA) into the provisional measure concerning the use of oil and gas revenues for specific spending programs.
The amended provisional measure, which will now go to the Senate for final approval, expands the possible uses of these resources.
As Reuters anticipated in April, the government has prepared an additional oil auction for this year with the aim of boosting revenue, seeking to raise at least R$20 billion from the sale of small portions of the pre-salt fields of Tupi, Mero and Atapu.
The blocks already sold in these areas do not cover the full extent of the oil reserves. The remaining portions, known as uncontracted areas, are already producing oil under existing agreements. These surplus zones will now be up for bidding.
The Speaker of the House, Representative Hugo Motta (Republicanos-PB), confirmed on social media that the measure could generate R$20 billion.
A source familiar with the matter said that the approval of the provisional measure eliminates the need for the separate bill, submitted by the government to authorize the auction.
However, the sale can only take place after the National Council for Energy Policy (CNPE) publishes a resolution and after the official auction notice is released.
A second government source stated that the auction will establish minimum prices for each area, with the highest bid securing extraction rights.
"Whoever wins will be able to extract all the oil from that area," the source said.
The approval of the provisional measure came after a major setback for the government earlier on Wednesday, when Congress overturned a presidential decree that had raised the Tax on Financial Operations (IOF) on certain transactions.
