Brazil to auction more oil blocs in 2010

Brazil plans to auction more blocs for oil and gas exploration in 2010, the Mines and Energy minister, Edison Lobao, said on Monday, but areas located in the subsalt layer would not be included.

The auction would only take place once the proposed new regulatory body which will oversee oil concessions has been approved by Congress. That is far from certain to happen in a year featuring a World Cup and presidential election.

“It’s my intention to convene the National Energy Policy Council and propose a new concession round excluding the subsalt,” Lobao said, adding this could happen next week.

Lobao is expected to step down as minister by April 1, under current election laws, to be able to run for reelection to the Senate in October.

Brazil suspended its annual offshore oil bidding rounds in 2007 after the discovery of the huge 5-to-8-billion-barrel Tupi subsalt field. The government managed to hold one onshore round for blocs with smaller potential since then but no other rounds have occurred.

When the government suspended new concession rounds it announced it would attempt to rewrite the country’s 1997 oil law in favor of moving to a production sharing system, with a larger government stake in future subsalt oil earnings.