“World’s biggest oil auction” flops, leaving Brazil in hot water

Billed in superlative terms, Brazil's tender of four pre-salt oil fields did not go as planned: foreign interest was almost zero and only two fields were sold
Transfer of Rights auction. Photo: Petrobras

After three years of anticipation, the Brazilian government’s hopes to reduce its public debt went down the drain on Wednesday, as what was billed as the “world’s biggest oil auction” turned out to be a near no-show. Of the BRL 106.5 billion in revenue expected to be raised, the sale of only two of the four pre-salt oil fields on offer generated roughly BRL 70 billion, which must be shared with state-owned oil company Petrobras, as well as Brazil’s states and municipalities, leaving little left for the federal government.

The results could have been even worse if it hadn’t been...

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