Brazil Government to Launch “Cheap Energy Shock” in Two Weeks

RIO DE JANEIRO, BRAZIL – On July 8th, Petrobras signed an agreement with the Administrative Council for Economic Defense (Cade) to entirely abandon the natural gas distribution and transportation market by 2021.

The commitment paves the way for both the company and the government to achieve the goal of ending the state-owned company’s monopoly on the market.

The aim is to reduce the price of gas and promote the “cheap energy shock” mentioned by Economy Minister Guedes.

On the energy sector, Guedes jokingly said that the Minister of Mines and Energy, Bento Albuquerque, “is sitting on top of a Middle East of oil reserves.”

Guedes also noted that the government was able to expedite the transfer of rights and that there is interest from all over the world in the auction of the areas scheduled for November 6th.

The auction for the transfer of rights will be held under the Production Sharing system as it is an area located in the deep water pre-salt of the Santos Basin.

The blocks on offer were originally established as part of the transfer of rights between Petrobras and the Federal Government on September 3rd, 2010.

The auction will include blocks development for the Atapu, Búzios, Itapu, and Sépia fields. The winner will be the one offering the most significant oil profit for the federal government, which is the result of the operation less the costs.

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