High Prices, Hidden Costs Discouraged Buyers at Brazil’s Petroleum Auctions

High minimum prices for lots and use of the production sharing regime led to no-shows by major oil companies in this week's two large petroleum auctions.

SÃO PAULO, BRAZIL – The enormous buildup surrounding this week’s petroleum field auctions in Brazil flopped, as no major oil company came forward to bid for the November 6th and 7th blocs, located along the Brazilian coastline. Headlines across the country deemed the auctions a failure, but according to a FGV professor the fiasco could have been avoided.

“There was excessive optimism and very high minimum prices for the lots in question,” Rafael Schiozer . . .

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