UPDATE 1-Brazil to hold new oil exploration auctions in 2013

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  • Posted on September 18, 2012

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    Tue Sep 18, 2012 2:48pm EDT

    * Mostly onshore blocks could be auctioned in May

    * Auctions depend on Congress passing royalty laws

    * November subsalt auction could follow

    BRASILIA, Sept 18 (Reuters) – The 11th round of auctions for oil exploration rights in Brazil will be held in 2013, if Congress passes the new royalties law, Brazil’s Energy Minister Edison Lobao said on Tuesday.

    The 174 blocks to be offered for exploration in Brazil’s first auction since 2008 will be detailed in coming days, but most of them are located on land, Loboa said at a news conference.

    He said he expects the final component of Brazil’s new oil law to pass Congress this year. Brazil is reforming the way it divides lucrative oil royalties among states, which have delayed passage of the law for years now.

    Loboa said if Congress passes the law soon the auction could likely be held in May of 2013.

    A second auction for exploration rights for the so-called subsalt fields off Brazil’s southeast coast could also be held in November of next year, Loboa said.

    Brazil’s subsalt has turned up some of the biggest deep water oil finds in history but they are considered technically difficult to abstract.

    Brazil in recent years has moved to increase government power over energy after giant offshore discoveries south of Rio de Janeiro. The lack of auctions has made it difficult for foreign and independent Brazilian oil companies to win new rights and guarantee long-term exploration and production investments in the country.