RIO DE JANEIRO, Feb 26 (Reuters) - Brazil’s National Petroleum Agency (ANP) recommended the next oil bidding round be delayed until late 2015 or early next year due to the recent plunge in oil prices and the likely limited participation of state-run oil company Petrobras, a source said.
The Brazilian government had previously pledged to hold the 13th oil bidding round, in which no subsalt fields would be included, in the first half of 2015.
The source who has knowledge of government discussions on scheduling the next oil round but did not want to speak on the record, said oil companies had asked the government to delay the auction due to diminished interest from potential bidders in the current market conditions.
Crude futures prices have fallen by half over the past seven months, casting doubt over the profitability of many marginal, higher cost exploration and production projects.
The source added that the state-run oil company Petroleo Brasileiro SA, known more commonly as Petrobras, had already informed the government that it would be selective about its participation and bid only on the most attractive projects.
The company, until recently a rising star among global oil companies, has become the focus of Brazil’s biggest corruption scandal in history. Prosecutors say billions of dollars were skimmed from the company to fund political parties including the ruling Workers’ Party.
The investigation, which has hurt many of the company’s major service and equipment suppliers for their alleged involvement in the kickback scandal, has shut Petrobras out of capital markets. The company is guarding its cash closely to assure funding for its priority projects.
In 2013, the ANP held three bidding rounds in a single year, including the massive subsalt prospect Franco that was won by a Petrobras-led consortium with France’s Total, Royal Dutch Shell and Chinese oil companies.
“With the new reality of the price of oil, companies are reviewing their investment plans across the world and Brazil is no exception,” the source said. (Reporting by Rodrigo Vigo Gaier; Writing by Reese Ewing; Editing by Chris Reese)