Brazil plans to hold two subsalt oil auctions in 2017, putting new exploration areas up for bidding in November for what should be the "most competitive" round of the year, Oil Secretary Marcio Felix said in an interview on Thursday. The auctions, an effort to lure foreign investment in a sector that for much of the past decade was the object of protectionist policies in Brazil, will be the first since 2013 for the offshore region known as the subsalt, where giant discoveries were made starting about a decade ago.
The first auction, expected in the first half of this year, will offer areas next to existing discoveries already in development, Felix said. The November auction will be for fresh exploration areas.
Besides Brazilian state-run oil company Petrobras, the opportunity to buy into new areas in one of the world's most exciting deep-sea oil areas should attract offshore majors such as Anglo-Dutch Shell, France's Total, and Norway's Statoil, Felix said.
Reduced investments by companies hampered by low oil prices should not be a problem, Felix said, describing the subsalt as the Olympics of offshore exploration. "If you're an athlete you're not going to miss the Olympics," he said.
The two subsalt auctions in 2017 represent a major shift in Brazil's oil politics. With the country in its worst recession on record, the center-right government hopes to attract foreign investment and reinvigorate oil exploration in a region long stifled by nationalist energy policies and the financial woes of Petrobras.
Felix said Brazil would hold three oil auctions in 2018, including a subsalt one. To give companies greater long-term clarity, he said he expected to release a calendar by the end of the year outlining oil auctions for the next five years.