Oil Majors bid for Brazilian offshore deposits as political pressure on industry intensifies

Oil Majors bid for Brazilian offshore deposits as political pressure on industry intensifies

Today, Exxon Mobile, Royal Dutch Shell and other major global oil companies will gather in Rio de Janiero to bid

An oil rig floats past Christ the Redeemer in Brazil

Photo: Getty

Today, Exxon Mobile, Royal Dutch Shell and other major global oil companies will gather in Rio de Janiero to bid on access to offshore Brazilian oil fields.

Today’s auction comes a little more than a week before the country votes in the first round of its state and federal elections. The major presidential frontrunners are far-right candidate Jair Bolsonaro and leftist candidate Fernando Haddad.

Without a doubt, the result of the elections will have some influence on global oil’s decision to open up new reserves in Brazil. Mr Bolsonaro has shielded his opinions on the matter, but his endorsement of free-market economic solutions to alleviate Brazil’s economic woes suggests he would likely be willing to cooperate with big oil.

Mr Haddad has, in contrast, argued that the country should open up its reserves while ensuring that Brazil is the primary beneficiary of their revenues by implementing more measures to establish state control of extraction.

Do not expect big oil to raise any major, alarming objections to either candidate yet, but for it to favour Mr Bolsonaro’s hands-off economic approach over Mr Haddad’s more interventionist one.

Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.