World’s highest-earning oil auction blighted by crude spill

Brazil tackles worst environmental ‘attack’ in its history, as Rio prepares for $25bn oil auction

As Brazil continues to tackle its crude spill, Rio prepares for one of the world’s highest-earning oil auctions.

Since early September the mysterious oil spill has blighted thousands of kilometers of beaches in north-east Brazil. Nine states have been cleaning the thick sludge from their shores, with more than 1,000 tonnes removed so far.

It is not known where the oil has come from. The Brazilian environment ministry said they are “certain” the oil is from Venezuela, after the state-run oil company Petrobras analysed the spill, narrowing its origins down to three Venezuelan oil fields. However, the government of Venezuela says the accusation is “unfounded”.

With the origins of the spill under dispute, it raises concerns about whether the Brazilian government is able to regulate its fast-growing oil industry.

The Transfer of Rights oil auction is expected to attract $25bn of foreign investment. But the spill could deter major global oil companies, who want to dissociate themselves from what Petrobras chief executive Roberto Castello Branco described as the worst environmental “attack” in the country’s history.

What is your sentiment on Oil - Brent?

110.73
Bullish
or
Bearish
Vote to see community's results!

However, Mines and Energy Minister Bento Albuquerque said the spill should have no impact on the auction. Speaking at an industry event in Rio de Janeiro he said he did not see any “cause and effect relationship” between the environmental disaster and expected bids.

“This oil which was found on the beaches of the north-east is not of Brazilian origin, so it has nothing to do with oil and gas activity in Brazil, nothing to do with oil and gas auctions,” he said.

The Brazilian government has been criticised for it’s slow response with local residents and volunteers cleaning up the oil themselves; many using their bare hands. However, Albuquerque said that the government is doing “everything it can” to handle the crisis.

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
iPhone Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image
Trade the world’s top tokenised stocks, indices, commodities and currencies with the help of crypto or fiat
iMac Image