Brazil will auction crude-exploration blocks on Wednesday for the first time since a colossal corruption scandal crippled the nation’s oil industry and forced state-run Petroleo Brasileiro SA to scale back investments.
More than 260 onshore and offshore areas are up for grabs, including deepwater blocks in the Sergipe-Alagoas basin off the country’s northeastern coast, where Petrobras has made a series of discoveries in recent years. Brazil, which relies on Petrobras for more than 90 percent of its oil production, is seeking to lure more large foreign operators to foster competition and bolster its flagging oil-services and naval industries.
Brazil will face many of the same headwinds that have hindered two oil auctions this year in Mexico. Oil prices have slumped almost 50 percent in the past year and companies fromConocoPhillips to Royal Dutch Shell Plc are slashing investments. On top of that, accusations that Petrobras executives and builders colluded to rig contracts have soured foreign investors on Latin America’s largest economy.
Brazil Energy Insight 
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